This page gives an overview of our employment settlement agreement services for employees. If you're an employer looking for professional advice on employment law, please visit our for your businesses page.
What is an employment settlement agreement?
A settlement agreement is a document that records the terms on which an employer and employee have agreed to terminate the employee's employment or settle a dispute. It will need to deal with all aspects of your employment.
It is a legal requirement that employees obtain independent legal advice before entering into a settlement agreement. Otherwise, it is not legally binding.
Benefits of using our employment lawyers for settlement agreements
Employees do not have to agree to a settlement agreement from employers. They do have the right to negotiate the terms of any agreement. Once you sign a settlement agreement, it is legally binding, and you cannot pursue any claims through the courts or an Employment Tribunal. We can advise you on your settlement agreement and negotiate more favourable terms for you, if you have not been properly compensated.
How our settlement agreement solicitors can help:
As well as advising you on the fairness of the financial terms offered to you, we can advise you on:
- Your prospective claims against your employer and the value of those claims
- Whether signing the agreement is in your interests and the best course of action for you
- The consequences of your signing the agreement or not signing it
- Your entitlement to salary and benefits (for example, pension, company car or private medical insurance), under your contract of employment, which a settlement agreement should cover
- What an “ex-gratia” or termination” payment is and what it is aimed at compensating you for
- Any tax due on the payments to be made
- Negotiating a quick resolution
- Facilitating an amicable exit.
For further information please contact one of the team.
Fees and employer contribution
A settlement agreement will usually include a contribution from you employer towards the costs of getting advice on the document. Employers typically offer between £250 and £500 plus VAT. They are not obliged to cover all your costs, only the costs of advising on the terms of the agreement.
Sometimes, if the agreement is straight forward and there are no issues with it or the settlement package, then our lawyers can advise you on its contents and sign the adviser’s certificate to make it valid - for somewhere in the region of £500 to £900 plus VAT depending on the seniority of the employment lawyer you engage to advise you.
Sometimes, when there are negotiations on the terms of the agreement, such as the financial package, our fees will be higher and tend to start from £750 plus VAT. Employers are often amenable to being persuaded by you or us to increasing the contribution. If the costs of instructing us are covered by your employer in full – we will raise an invoice to you but (payable by your employer). This invoice will be sent to your employer to pay direct to us. However, if:
- You do not accept the package and settlement agreement; or
- Your employer will not pay all of your legal costs;
then we will invoice you for our costs agreed with you and you will be liable to pay us.
If your employer defaults on the invoice raised and payable by them, you, as our client, will remain liable for our costs.
Find out more about:
Our client was, without warning, told his employment was being terminated and handed a settlement agreement. We advised him on the process, the arguments to advance and the level of compensation to argue for. He negotiated a 50% increase and for his employer to pay his legal fees. The matter was resolved within a couple of days.