What is a Settlement Agreement?
A Settlement Agreement (previously known as a “Compromise Agreement”) is a legally binding agreement following the termination of your employment.
Settlement agreements are often given to employees when they are being made redundant. However, they can also be offered to employees if an employer thinks they are performing badly in their job or are guilty of misconduct. In some cases, an employee will be aware that their boss is unhappy, while for others, being offered a settlement agreement can come as a shock.
Essentially, an employee is given money or severance pay in return for not bringing a claim against their employer. Each settlement agreement will vary but usually the documents will include clauses that deal with: the claims to be settled; the payments you will receive and the relevant tax issues; a confidentially/gagging clause (so you can’t bad mouth your employer) and any agreed reference from your employer. Once signed by both the employer and the employee and certified by an independent solicitor, a settlement agreement becomes legally binding.
How we can help
When you’re pulled into a meeting and asked to leave your job, it can be a shock. Later on, it can be hard to recall exactly what was said. The best advice is therefore to make a note about what happened and what was said as soon as possible. The next thing to do is get some decent advice. An employer will usually pay the legal costs for you to see a solicitor or qualified adviser independent of the employer as it is a legal requirement for the settlement agreement to be contractually binding on the employee.
An employment solicitor can help you consider whether you’re getting a good deal and whether you have any grounds for a claim against your employer – such as discrimination or unfair dismissal. If you’re facing a period of unemployment, you need to be able to meet your household living expenses until you get another job. One of the considerations you need to make is whether the money that is being offered is enough.
You need to consider why you are being offered the agreement and what rights you are being asked to waive as a result of you signing. Armed with this knowledge, you can often save legal costs by negotiating yourself directly with your employer and in our experience, you often end up with a better deal, which may include a bigger payment.
The employer will often insist that the settlement agreement be signed by a particular date, but you are not legally obliged to sign a settlement agreement and if you don’t sign the agreement, then your full employment rights are reserved for you to make a claim against your employer.
To see some typical terms of a settlement agreement and our advice on them, please click here.
I approached several local companies about advice on an employment matter. Barrett and Co were, by far, the most responsive and flexible. The advice I received from Justin Sadler was timely, expert, professional and concise. Thank you for a great service.
17th November 2020
Based on my experience I would have no hesitation to recommend Barrett and Co to any friend or family member in need of legal services. Further, any legal service is only as good as the people within it and the people at Barrett and Co are brilliant. They are helpful, communicative, understanding and patient. They explain the options and when legal language is required and necessary they are willing to sit down and explain what it mean in plain english. Great people and a Great service,
7th October 2020
Paul was really responsive, supportive and answered all my questions in a really honest and professional way. It was a pleasure working with him and i would recommend him to anyone needing a solicitor. Thank you Paul
6th October 2020
I have worked with Justin Sadler several times and he always responds really well with easy to understand advice
5th September 2020
Vanessa drew up my will after a video consultation (due to Covid 19) and then I got it signed and witnessed in the office car park maintaining social distancing. My will was very straightforward but Vanessa ensured that all necessary areas were considered and addressed. I received a very professional, courteous service and I would certainly use Barrett and Co again.
3rd September 2020
Dealt with Chris Miller who was fantastic from the start. Clear assessment of the issues and risks with great guidance and proactive communications. Chris is a very valuable asset and I would recommend him fully. The only issue I had was with the bill which was not clear and had to be adjusted. We won the case with costs awarded but it still cost us the best part of £1400, not sure how that works....
16th August 2020
Justin Sadler provided an excellent service in relation to an employment matter. His clear and concise guidance provided me all the necessary assurance and support to conclude the matter. The rest of the team at Barrett's, where also very professional and highly responsive in the short time I had available to reach a conclusion. Barrett's certainly instilled a strong sense of trust and would definitely be my first choice for any future legal matters.
13th August 2020
From start to finish these guys made me feel at ease during a turbulent time. First class service from all who I death with so I highly recommend them.
6th May 2020