Our employment solicitors have years of experience in negotiating the best financial terms in settlement agreements.
The benefits of entering into a settlement agreement can be:
Quicker process: A settlement agreement can avoid the amount of time a case will take to reach a conclusion and save the expense of litigation.
Guaranteed Compensation: Voluntarily entering into a settlement agreement means you’re giving up the right to pursue an employment tribunal claim (as specified within the agreement) against your employer, in turn for payment of agreed compensation.
This takes the risk out of pursuing an employment tribunal or court case and being unsuccessful. Also, it offers the certainty of you receiving compensation within an agreed timescale.
Most clients prefer jam today. Most clients want to move on and draw a line. We recognise that there is a trade off between certainty and maximising your settlement.
Professional Reference: Often, your employer will agree to provide you with a reference for future employees, which is a benefit as an Employment Tribunal has no power to order employers to provide one for you.
Tax-Free payment: An agreed lump sum for payment of compensation for loss of employment can be paid tax-free up to £30,000. Other tax free allowances are available in certain circumstances.
Total Confidentiality: The facts and terms of a settlement agreement are customarily kept confidential to the employee and employer other than for disclosure to professional advisers and the employee’s immediate family.
What is a Settlement Agreement?
The key points are:
- A settlement agreement is a binding agreement between you and your employer. Once signed, it means that you are not entitled to bring a legal claim against your employer concerning your employment.
- Because you are giving up valuable rights, a settlement agreement is only valid if you have been advised by an appropriate adviser, which is usually a
- Some settlement agreements for senior employees make provision for a period of garden leave. You may be asked to sign two settlement agreements: one when your garden leave starts (the belt), and another when it ends (the braces).
- There are two exceptions to settling all claims: Personal injury claims are usually excluded unless you are aware of any actual or potential claims at the point of signing. Any rights accrued under your pension scheme are also excluded.
- Usually, the employer will pay a contribution which generally covers the solicitor fees, and the amount will be set out in the settlement document.
We have published several guides on settlement agreements, downloadable here.
Our years of experience in acting for 1000s of employees who have been given a settlement agreement has sometimes improved the final financial offer by tenfold. You can contact our employment lawyers and expert legal team on 01780 757 589 request a call-back or complete our quick online enquiry form.