Settlement Agreement

Settlement Agreement

A settlement agreement is a legally binding agreement made between you and your employer and is usually used to end a period of employment or to settle a dispute.
Your employer will pay you a lump sum under the terms of the agreement and in return you will waive some of your rights, such as the right to make a legal claim against them. You will also usually be required to agree to certain terms and conditions.
Because a settlement agreement is a waiver of certain entitlements, it is a legal requirement that you take independent legal advice before signing. Your employer will usually pay a contribution towards the cost of this.

Clear, practical advice

At Goodwyn Herrera we are employment experts, representing employees across a range of issues, to include disputes, termination of employment and settlement agreements.
We are known for our thorough approach and attention to detail as well as our strong negotiating skills. If you have been offered a settlement agreement, we will go through the terms of it with you to ensure you understand the implications of signing. If we believe you could do better, we will negotiate with your employer to ensure that you receive the best possible offer.
We understand that dealing with the termination of your employment and/or a dispute with your employer can be a difficult and stressful time and we will make sure we are available to speak to you and offer support throughout.

The offer of a settlement agreement

A settlement agreement is often used as a means of making a clean break between and an employee and employer. As well as being used to settle a dispute, it can be offered in a voluntary redundancy situation as a way of ending employment without delay or when employment terms and conditions change.

Key clauses in a settlement agreement

The agreement will give the agreed date on which employment will end. The amount of compensation that you are to receive will be specified together with details of when it will be paid to you. The first £30,000 of compensation is usually paid free of tax or national insurance, although you will be required to give an indemnity in respect of tax liabilities.
Any other payments that you are owed should also be included, such as commission, bonuses or holiday pay.
The amount of notice will be stated and whether you will work this or receive payment in lieu.
You will be required to waive your right to bring any legal claims against your employer in the future, although this will not include certain actions such as for personal injury compensation.
Your employer will also want you to agree to keep matters confidential, both in respect of the settlement agreement and in respect of their business affairs.
You will be asked to agree to a number of restrictive covenants, such as not to set up in competition near your employer or to solicit their clients. We will ensure that these are not unfair or too widely drafted.
We can also negotiate a reference for you to be given to potential future employees. The wording can be agreed and put into the agreement so that you can be sure what your employer will say about you.
A settlement agreement is a complex document and it is important that you do not sign it until you are satisfied that it is in your best interests to do so.

Contact us

If you have been offered a settlement agreement or you are involved in a dispute with your employer, you should seek legal advice to ensure that your rights and interests are protected.
At Goodwyn Herrera we are experienced in providing employment law guidance to employees in all sectors. Our advice is clear and practical and we will work hard to obtain a fair and just outcome on your behalf.
We understand how difficult it is to be involved in a dispute with your employer or to be facing redundancy. We are friendly and approachable and work in a hands-on way to ensure that you have support and guidance throughout.
If you would like to speak to an expert employment solicitor, call us on 020 81 875 555 or email us at to make a free no-obligation enquiry.

Get in touch with us

At Goodwyn Herrera we are experienced in providing employment law advice to businesses. Our clear and practical advice is designed with your business success and commercial objectives in mind. If you would like to speak to an expert employment solicitor, call us on 020 8187 6495 or email us at make a free no-obligation enquiry.