Settlement Agreement Solicitors

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 legal advice you need to be able to proceed.

Settlement agreements explained

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

The 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 to understand their settlement agreements and get the best outcome for them.

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.


1. 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.

2. 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 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.

3. I've received a settlement agreement from my employer and I'm happy with the terms - what do I do next?

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.

4. 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 service.

5. Is a settlement agreement the same as redundancy?

Although a settlement agreement can be used in a redundancy situation, 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 a claim for unfair dismissal against their employer.

6. What happens if either party breaches the 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.

7. How much will a settlement agreement cost?

Employees should not be charged for signing a settlement agreement. When making a settlement agreement, the cost is usually covered by the employer and we will not charge more than their contribution.

8. Are settlement agreements tax free?

The amount of settlement agreement compensation you receive will determine whether it 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.

9. 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.