Settlement Agreements

Settlements are often negotiable. You can discuss changes to the financial terms or other provisions through your solicitor, who can advise on strategy and negotiate with your employer on your behalf.

If either party breaches the agreement, the other may be entitled to take legal action. This could include seeking payment of amounts owed or enforcing confidentiality provisions.

Factors such as your length of service, salary, potential claims, and the strength of your legal position should all be considered. Legal advice will help you understand what is reasonable to request and whether the offer reflects your circumstances.

Once signed by both parties, the agreement takes effect. Your employment will usually end on the agreed date, and payments should be made in accordance with the terms set out in the agreement.

It is usual for the employee to sign first, after receiving independent legal advice. The solicitor will provide a signed adviser's certificate alongside the agreement. The Settlement Agreement only becomes binding once both you and your employer have signed, together with the accompanying certificate.

The agreement is usually signed by the employee and an authorised representative of the employer. The employee must receive independent legal advice from a qualified adviser – typically a solicitor – and the adviser is usually required to provide a signed certificate confirming that advice has [...]

Most Settlement Agreements include confidentiality clauses, which restrict what you and your employer can say about the agreement and, in some cases, the circumstances surrounding your departure. However, nothing prevents you from speaking to your solicitor about the terms.

You should be given a reasonable amount of time – usually at least 10 days – to consider the agreement. You should not feel pressured to sign without first taking proper legal advice.

Some payments under a Settlement Agreement may be tax-free (termination payments up to £30,000 are typically exempt), but others – such as wages or payments in lieu of notice – are subject to income tax and National Insurance in the usual way. A specialist solicitor will [...]

For a Settlement Agreement to be binding, it must contain certain prescribed clauses, including confirmation that independent legal advice has been taken, the identity of the adviser, and that the statutory conditions have been satisfied.From the employee's perspective, the agreement should clearly set out: the total [...]