Settlement Agreement Solicitors

Your employer may have asked you to sign an employment settlement agreement to record your agreement to not pursue legal or court action against them following an employment issue or the ending of the employment relationship.

No. If you do not agree to a settlement agreement, you have the right to negotiate the terms. A settlement agreement lawyer or solicitor has your best interest in mind and can help to secure the best agreements possible for you. When negotiating a settlement agreement, the things you should consider are the amount of compensation you are being offered and if the terms will affect your ability to get a new job.

If you are happy with the terms of your settlement agreement, our solicitors can provide legal advice so that you fully understand what you are signing up to. A settlement agreement solicitor will also review the proposed terms set out by your employer to determine whether they are reasonable or not and make sure your rights are protected before you sign. This includes making sure you have rights to holiday entitlement, to a paid salary and any other benefits your contract states before the end of your employment.

Yes, getting expert advice to make an employment settlement agreement is a legal requirement. Settlement agreements must be reviewed and signed by a qualified lawyer before they can be deemed lawful. The legal advisor must be identified and insured. At Thompsons, we have a team of settlement agreement solicitors who specialise in this area of employment law.

Although a settlement agreement can be used as part of the redundancy process, it is not the same. A settlement agreement documents that an employee agrees to waive their rights to bring any legal action against their employer. Redundancy is different as it doesn’t waive an employee’s rights. In a redundancy situation, an employee may choose to sign a settlement agreement rather than take a redundancy package as they could get more money. However, by signing the agreement they would give up their right to make an unfair dismissal claim against their employer.

Settlement agreements are voluntary and you do not have to sign an agreement if you do not accept the terms. If not signed, the agreement is invalid and you are able to bring or continue any potential legal claim against your employer. You would remain employed and your employer may consider ending your employment by an alternative means, such as by following a disciplinary procedure or capability process.

A settlement agreement can be breached in a number of ways, such as an employee bringing a claim against an employer despite agreeing not to in the terms of an agreement, or an employer failing to pay an agreed sum of money. As a settlement agreement is a legal document, once breached, a claim can be brought to the courts for breach of contract.

Employees should not be charged for signing a settlement agreement. When making a settlement agreement, the cost of legal advice is usually covered by the employer and stipulated within the agreement. Thompsons Solicitors will not charge you more than your employer’s contribution of legal costs and you will receive 100% of the payment. We will not take any deductions.

The amount of settlement agreement compensation you receive will determine whether your settlement agreement is tax free. Typically, the first £30,000 of payments made in a settlement agreement are tax free, however, any payments made for holiday entitlement and salary will be taxable as per usual.

Settlement agreements usually include a confidentiality clause which prevents the agreement and terms being disclosed to third parties. However, our specialists can ensure that the clause is not overly restrictive and that it is balanced in your favour to ensure you can discuss matters with relevant parties, such as prospective employers and your professional advisors.

There is no legal obligation for an employer to provide an employment reference. For an employer to be legally obliged to give a reference, there must a relevant clause included in the agreement that confirms they will do this. It should also stipulate how they will provide it and within what timescale. Find out more in our guide to getting a job after a settlement agreement.