Settlement Agreement Advice
Been offered a settlement agreement by your employer? By law you’ll need independent legal advice before you sign. I’m a specialist employment solicitor offering fast, clear, plain-English advice on settlement agreements.
What is a settlement agreement?
A settlement agreement is a legally binding contract between you and your employer. In it, you agree to give up your right to bring certain legal claims, usually in return for a payment. They’re most often used on redundancy, on an agreed exit, or to resolve a dispute without going to an employment tribunal.
Why do I need independent legal advice?
A settlement agreement is only valid if you’ve had advice from a “relevant independent adviser” (normally a qualified solicitor) on its terms and their effect on you. My job is to make sure you understand exactly what you’re signing, what you’re giving up, and whether what’s on the table is fair.
How much does settlement agreement advice cost?
In almost all cases, your employer contributes towards your legal fees as part of the deal and, depending on the amount of the contribution and the complexity of your situation, that may be sufficient to cover the advice in full. Where it isn’t, you can try to negotiate an increase to the contribution but I’ll keep you updated on the costs so there are never any surprises.
Can I negotiate a better deal?
Potentially, yes. There’s often room to improve the payment, the reference, the message to colleagues, or the covenants you're being asked to reaffirm. I'll advise you on where there's realistic scope to negotiate and where there isn't and, if you'd like, take the negotiation forward on your behalf. Having sat on the employer's side of the table, I can help you understand how your request is likely to be received and how to frame it accordingly.
Frequently Asked Questions
-
No. It’s entirely voluntary. If you don’t sign, you keep whatever rights and claims you already have, and I’ll advise you on those so you can make an informed choice.
-
Your employer should give you a reasonable time to consider the settlement agreement, and best practice is to allow you at least 10 calendar days to consider the terms of the agreement and take advice, although you and your employer can agree a different timescale.
-
The first £30,000 of a genuine, non-contractual termination payment is usually tax-free. Notice pay, pay in lieu of notice, holiday pay and other contractual sums are taxable. I’ll explain how it applies to your figures.
-
Usually yes. Employers often include an agreed reference in the agreement, so you know exactly what a future employer will be told.