Settlement Agreements- Everything You Need To Know

  • Author: David Crosby
  • Posted on: 26th May 2020
  • Posted in: Blog

When an employer mentions offering a Settlement Agreement, many employees will not have come across this term let alone understand if they are getting a fair deal, so here's what a Settlement Agreement is and how it can benefit you.

What Is A Settlement Agreement?

A Settlement Agreement also known as a Compromise Agreement is a legally binding ‘contract’ between an employer and an employee to bring an end to a working relationship in a way that gives certainty and finality for both parties.

Why Do Employers Use Settlement Agreements?

Settlement Agreements are used by employers to terminate a contract of employment and ensure that there is no opportunity for an employee to take them to court or tribunal to claim further money once the employee has left the company.

How Will It Benefit You?

Settlement Agreements are used to help resolve workplace disputes. The majority of employers and employees would view this method to be a much better way of resolving workplace disputes than to have to face the stress and uncertainty of possible Court or Tribunal proceedings.

Why Do I Need A Solicitor?

This contract is not something that can simply be drawn up between Employer and Employee. An employee is required to receive independent legal advice from an appropriate ‘legal advisor’ to help ensure that the agreement is enforceable. A solicitor will also ensure that there is no discrimination from the employer which may lead to unfair dismissal.

Are there costs involved?

It is standard practice for an employer to also make a financial contribution towards the cost for an employee to get that advice and in many cases, as the terms have already been discussed and in the main agreed, that contribution will be sufficient to meet the legal costs to be paid.

Next Steps

If you have been offered a Settlement Agreement and want to make sure it is fair and reasonable, then speak to one of our friendly and experienced solicitors for expert advice today on 01273 734 600 or email