Settlement Agreements

Receiving a settlement agreement (formally known as a compromise agreement) from your employer can be daunting. Birkett Long’s expert employment lawyers give you the specialist advice that you need. We guide you every step of the way, so you can make informed decisions and get the best possible offer from your employer. If your employment has ended or is ending, and you have been offered a settlement agreement or financial package, call our team of employment solicitors on 01206 217300 to find out how we can help you.

What is a settlement agreement?

A settlement agreement is a legally binding contract between an employer and employee, which prevents an employee bringing claims against their employer. It can be used during employment, at the end or to settle an employment tribunal case.

It is a legal requirement that you must receive advice from a “relevant independent adviser” before signing a settlement agreement. It must also be legally binding.

The specialist adviser must:-

  • advise on the terms and effect of the proposed settlement agreement; and
  • advise on the settlement agreement’s effect on your ability to pursue your rights in an employment tribunal; and
  • have a contract of insurance covering the risk of claims which might arise from their advice on the terms of the proposed agreement.
  • Our specialists in employment law are qualified lawyers, covered by a contract of insurance. They are experienced in giving the basic advice you must receive on the terms of a settlement agreement. They can act as your relevant independent adviser.

What other employment advice do I need?

Receiving independent advice on a settlement agreement will prevent you from pursuing claims in an employment tribunal. Consequently, we believe you should also receive advice on:

  • your contractual and statutory entitlements and whether the offer falls short, meets these entitlements or exceeds them
  • the terms of the agreement and whether they could be improved to better protect your interests
  • any alternatives to entering into the agreement. For example, bringing a claim and what your legal costs might be compared to any award

We believe you should be advised on whether the agreement represents a good deal for you. If it isn’t, we suggest what a good deal might look like. We can recommend a proposal to put forward as an alternative. Only by receiving advice on these items in this way, can you fully understand your position. You can then consider whether accepting or rejecting the settlement agreement is right for you.

How much does a settlement agreement cost?

It is very likely that your employer (or former employer) will offer to pay for, or contribute towards, your legal fees. Contributions vary greatly, but generally start at £250 plus VAT. We are often, but not always, successful in securing an increased contribution from employers as part of negotiations.

We discuss costs with you at the outset. Our fees for advising on settlement agreements depend on your personal circumstances and any complicating factors.

You may be happy that the offer you have is reasonable, or simply want the required advice and no more. In this case, we can provide advice by telephone and email. This advice would cover the terms and effect of the settlement agreement. The advice would also cover its effect on your ability to pursue your rights in an employment tribunal claim. If you wish to meet to run through the settlement agreement, we would be happy to do so. This is likely to incur additional time and cost, which will be discussed with you.   

We can also advise you beyond the required advice on the terms and effect of the settlement agreement. We can help you consider whether it is a good deal or not.

Our fees for advising on a settlement agreement will not be less than £500 plus VAT and you may have to fund a shortfall.  

To find out more, call one of our employment solicitors now on 01206 217300.