Settlement Agreements

Have you been asked to sign a settlement agreement? This is a document which offers an employee a termination settlement in return for a binding agreement not to bring claims against their employer in the employment tribunal.


Settlement agreement

The law only allows you to give up employment rights in limited circumstances. You must first have legal advice from a properly qualified advisor, such as a solicitor, as to your employment rights. Then you and the advisor must sign a document in the right form – this is a settlement agreement and it prevents you from bringing claims to the employment tribunal. 

A settlement agreement will nearly always include a termination payment and specify when and how your employment will come to an end.  It may also have terms dealing with:

  • how much of the termination payment will be taxed
  • whether any benefits may continue after your employment terminates
  • whether you will receive a reference
  • whether any restrictive covenants will be imposed.


There may be other terms.  


Your options

As your solicitors, our job is not only to explain the effect of the settlement agreement to you, but also to give you advice about your options. You may accept the package or you may decide to try to obtain improved terms of settlement. If a satisfactory agreement is not reached, you may consider rejecting the settlement agreement and enforcing your employment rights. The decision is entirely a matter for you.  When we have your instructions, we will advise you on how you may proceed.

Our solicitors can advise you on all aspects of settlement agreements.

Meet the Settlement Agreements team