Settlement Agreements – Employees

 Settlement or claim?

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Settlement Agreement and pen



Doing a deal

Your employer may want to end your employment but be willing to offer you money to leave and not make a claim. If you are prepared to make a deal it is fairly easy to give up your contractual rights. However you can’t just sign away your statutory rights and your employer won’t want to do the deal you unless you do give up those rights.

One way to ensure the settlement is final is for you to sign a Settlement Agreement. This requires you to get independent legal advice which is referred in the agreement.


Giving up your rights

Under a settlement agreement you sign away any potential claims which you may have against your employer as a result of their actions or dismissal. For example claims for unfair dismissal, discrimination, notice pay etc. However the courts say that the agreement must identify genuine potential claims.

As well as settling the actual dispute a settlement agreement can cover other issues. For example you might want a reference attached to the agreement or continuation of your benefits for a period. Similarly your employer may want you to agree to keep the terms of the agreement confidential or require you not to make disparaging comments about them.


Is it a good deal?

You need to decide whether the benefits being offered are worth it compared to making a claim. You need to know the potential value of your claim and the strength of your case. We can advise you about these issues. The cost of making a claim is also important. Costs aren’t just about money such as legal costs. There’s also a cost in time and stress.


Contribution to legal costs

An employer wants a binding deal so they are normally prepared to pay at least something toward your legal fees related to a settlement agreement. This is on top of the settlement payment.


It’s binding

So remember once a settlement agreement is signed you won’t normally be able to make a claim against your former employer. Therefore it is important to know what claims you might have and what rights you are giving up. I can advise you about reaching a fair compromise.


Kirsten Moon – Employment Law Solicitor – Partner


01233 714055


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