If you receive a settlement agreement from your employer, it can be a daunting task deciding what to do next. Whether you decide to agree or negotiate the terms set out in your employment settlement agreement, Thompsons Solicitors can offer the independent legal advice you need to be able to proceed.
What is a settlement agreement?
A settlement agreement, formerly known as a compromise agreement, is a legally binding contract used by employers to set out terms and conditions agreed upon by an employee to end an employment relationship or resolve a dispute. They usually involve an employee receiving payment in return for giving up their rights to bring about an employment rights claim against the employer.
How our settlement agreement solicitors can help you
An employee must seek legal advice for the settlement agreement to be legally binding. At Thompsons Solicitors, we have a dedicated team of settlement agreement solicitors who specialise in helping employees understand their settlement agreements and secure the best outcome.
Our team of experts have helped thousands of people to secure the best settlement agreements possible through our fast and efficient service.
We have represented employees of well-known organisations from a range of industries, including:
- All major UK car producers
- Financial service providers, such as Allianz and Legal and General
- Colleges and universities
- National and international aerospace engineering firms including Flybe, Airbus and GKN Aerospace
- National energy suppliers
- Major players in the British food and drinks industry, such as Cadbury, Ginsters and Carlsberg
- Holiday providers including P&O Ferries and Thomas Cook.
If you find yourself being asked to sign a settlement agreement, Thompsons can assist. Simply complete our online settlement agreements form to start the process.
Frequently Asked Questions about Settlement Agreements
Why have I been asked to sign a settlement agreement?
Your employer may have asked you to sign an employment settlement agreement to record your agreement to not pursue legal or court action against them following an employment issue or the ending of the employment relationship.
Do I have to agree to a settlement agreement?
No. If you do not agree to a settlement agreement, you have the right to negotiate the terms. A settlement agreement lawyer or solicitor has your best interest in mind and can help to secure the best agreements possible for you. If you decide to negotiate, the things you should consider are the amount of compensation you are being offered and if the terms will affect your ability to get a new job.
How do you accept a settlement offer?
If you are happy with the terms of your settlement agreement, our solicitors can provide legal advice so that you fully understand what you are signing up to. A settlement agreement solicitor will also review the proposed terms set out by your employer to determine whether they are reasonable or not and make sure your rights are protected before you sign. This includes making sure you have rights to holiday entitlement, to a paid salary and any other benefits your contract states before the end of your employment.
Do I need legal advice to make a settlement agreement?
Yes, getting expert advice to make an employment settlement agreement is a legal requirement. Settlement agreements must be reviewed and signed by a qualified lawyer before they can be deemed lawful. The legal advisor must be identified and insured. At Thompsons, we have a team of settlement agreement solicitors who specialise in this area of employment law.
Is a settlement agreement the same as redundancy?
Although a settlement agreement can be used as part of the redundancy process, it is not the same. A settlement agreement documents that an employee agrees to waive their rights to bring any legal action against their employer. Redundancy is different as it doesn’t waive an employee’s rights. In a redundancy situation, an employee may choose to sign a settlement agreement rather than take a redundancy package as they could get more money. However, by signing the agreement they would give up their right to make an unfair dismissal claim against their employer.
What happens if I don’t sign my settlement agreement?
Settlement agreements are voluntary and you do not have to sign an agreement if you do not accept the terms. If not signed, the agreement is invalid and you are able to bring or continue any potential legal claim against your employer. You would remain employed and your employer may consider ending your employment by an alternative means, such as by following a disciplinary procedure or capability process.
What happens if you breach a settlement agreement?
A settlement agreement can be breached in a number of ways, such as an employee bringing a claim against an employer despite agreeing not to in the terms of an agreement, or an employer failing to pay an agreed sum of money. As a settlement agreement is a legal document, once breached, a claim can be brought to the courts for breach of contract.
How much do solicitors charge for settlement agreements?
Employees should not be charged for signing a settlement agreement. When making a settlement agreement, the cost of legal advice is usually covered by the employer and stipulated within the agreement. Thompsons Solicitors will not charge you more than your employer’s contribution of legal costs and you will receive 100% of the payment. We will not take any deductions.
Are settlement agreements subject to tax?
The amount of settlement agreement compensation you receive will determine whether your settlement agreement is tax free. Typically, the first £30,000 of payments made in a settlement agreement are tax free, however, any payments made for holiday entitlement and salary will be taxable as per usual.
Can I tell anyone about a settlement agreement?
Settlement agreements usually include a confidentiality clause which prevents the agreement and terms being disclosed to third parties. However, our specialists can ensure that the clause is not overly restrictive and that it is balanced in your favour to ensure you can discuss matters with relevant parties, such as prospective employers and your professional advisors.
Will my employer give me a reference after I’ve signed a settlement agreement?
There is no legal obligation for an employer to provide an employment reference. For an employer to be legally obliged to give a reference, there must a relevant clause included in the agreement that confirms they will do this. It should also stipulate how they will provide it and within what timescale.
Why should I use Thompsons' settlement agreement solicitors?
Thompsons Solicitors has a nationwide Settlement Agreement Unit (SAU) comprising lawyers with extensive experience in advising and supporting people to secure the best settlement agreement possible. We pride ourselves on providing a fast and efficient settlement agreements service, finalising those with even the most urgent deadlines.
Our settlement agreement solicitors will contact you to confirm receipt of the request for advice, and the relevant documents, and to arrange a telephone appointment between you and a specialist settlement agreement solicitor. During that call we will discuss any legal fees that will apply and run through what will happen next.
If you require assistance with completing the form, or have a query relating to an employment settlement agreement you have received, please call 01752 521 888.
Trade union member?
If you are a trade union member, visit our dedicated site to learn more about how Thompsons’ settlement agreement solicitors can support you.