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INDEPENDENT EMPLOYMENT LAW ADVICE
SETTLEMENT AGREEMENTS FOR EMPLOYEES
Received a settlement agreement from your employer? Our employment solicitors will review the terms, explain the payments and legal clauses, and advise if changes should be requested before you sign.
Advice for employees
Who Can Be Offered a Settlement Agreement?
A settlement agreement may be offered when an employer and employee are considering ending the employment relationship on agreed terms. It can arise during a redundancy process, after a workplace grievance or dispute, or as an alternative to continuing with disciplinary, capability or performance procedures.
The agreement sets out the financial offer and the practical arrangements for the employee’s departure. The terms may cover compensation, notice pay, outstanding holiday, bonuses, benefits, an agreed reference, confidentiality and restrictions that continue after employment has ended.
You are not required to accept the first proposal made by your employer. Before you sign, your solicitor should consider the agreement alongside the circumstances that led to the offer, explain the legal claims you will give up and advise if the payment or other terms should be changed.
Understanding the terms
What Must a Settlement Agreement Include?
A settlement agreement covers more than the compensation being offered. It should clearly record the terms agreed between you and your employer, identify the legal claims being settled and explain the obligations that continue after your employment ends.
The document should also deal with the practical arrangements surrounding your departure. This can include the termination date, final salary, notice pay, unused holiday, benefits, tax treatment, reference wording, confidentiality and restrictions on future employment.
- The agreement and the claims being settled must be recorded in writing
- You must receive advice from a relevant independent adviser
- Compensation, contractual payments and payment dates should be clear
- References, confidentiality and post-employment restrictions should be reviewed
Settlement agreement FAQs
Common Questions About Settlement Agreements
Do I Have to Accept the Initial Offer?
No. Settlement agreements are voluntary, and you are not required to accept the first terms proposed by your employer. The compensation, payment arrangements, reference wording, confidentiality clauses and restrictions on future employment may all be discussed before the agreement is signed.
How Long Should I Be Given to Consider the Agreement?
The Acas Code recommends allowing employees at least 10 calendar days to consider the formal written terms and obtain independent advice. The appropriate period can depend on the circumstances, and a different timeframe may be agreed between the parties.
Why Do I Need Independent Legal Advice?
A settlement agreement cannot usually prevent you from bringing the claims listed in the document unless you have received advice from a relevant independent adviser. Your solicitor will explain the effect of the agreement, the rights being waived and any terms that may require clarification or amendment.
Can My Solicitor Negotiate the Terms?
Yes. If the proposed compensation or other terms do not reflect your circumstances, your solicitor can advise on requesting changes. Negotiations may cover the financial package, notice pay, bonuses, holiday pay, an agreed reference, confidentiality wording and post-employment restrictions.
Will My Employer Pay My Legal Fees?
Many employers offer a contribution towards the cost of obtaining independent advice, although they are not legally required to do so. The agreement should state the amount available and how the solicitor’s invoice will be paid. Additional fees may apply if detailed negotiation or further work is required.
Start your agreement review
Request a Settlement Agreement Review
Complete the form and, if available, upload your settlement agreement. A member of our employment law team will contact you to discuss the document, your employer’s deadline and the next steps.
Your information will be handled confidentially. Sending this form does not create a solicitor-client relationship.