Settlement Agreements

You may have been offered a settlement agreement following a “protected conversation” where issues of performance or conduct have been raised and your employer has offered you a settlement as a way of avoiding stressful disciplinary or capability procedures.  A settlement agreement may also be offered during a redundancy process where enhanced redundancy payments are being offered or a fair redundancy process has not been followed.  Finally, your employer may offer you a settlement agreement to bring your employment to an end in order to resolve a grievance raised by you.

If you have been offered a settlement agreement by your employer to bring your employment to an end, we can offer independent advice on the agreement itself and potentially help you negotiate better terms. This can be a stressful time for anyone but our lawyers are here to support you through the process in a timely, cost effective and supportive way.  

What are settlement agreements?

Settlement agreements are the way that employers and employees can lawfully resolve disputes in a way that prevents any claims or further claims being brought against the employer.  Any other agreement (other than an ACAS COT3 agreement) is not legally binding even if you sign it.

In order to be enforceable the employee must obtain independent legal advice and the employer will normally pay for this (or at least offer a contribution).  The contribution from the employer is usually between £500 plus VAT and £1750 plus VAT depending on the complexity of the agreement and that is normally paid directly to the solicitor on conclusion of the agreement.

Settlement agreements can be used to bring employment to an end on mutually agreed terms or to resolve claims which are raised or issued after the employment relationship has terminated, although tribunal claims which settle are normally settled by way of a COT3 agreement via ACAS (the conciliation service).