At TV Edwards, our experienced Employment Law team provides expert Settlement Agreement legal advice tailored to employees. We represent employees across all industries, from junior workers to senior executives, and take time to understand your circumstances.
Settlement agreements are used by many employers to avoid or settle workplace disputes but are sometimes also used by employers in redundancy or other circumstances, and to minimise the risk of potential claims being brought by former employees. Our solicitors can guide you through the process, helping you understand your rights and options.
Need Settlement Agreement Advice? Contact Us Today
If you are dealing with a workplace issue and are unsure what to do next, early legal advice can make a significant difference when it comes to the result of your case. Our Settlement Agreement solicitors can help you:
- Understand your legal position and options
- Protect your rights as an employee
- Resolve your dispute quickly and effectively
- Negotiate settlements or represent you in claims
Speak to our team today and we will help you with your case.
What is a Settlement Agreement?
A settlement agreement (formerly known as a Compromise Agreement) is a legally binding agreement made between you and your employer, which will usually provide for a severance payment by the employer, in exchange for your agreement that you will not pursue any claim arising from your employment.
Settlement agreements are often used in situations whereby an employer and an employee have had a disagreement that does not appear capable of being resolved, and to give both parties a “clean break” in terminating the employment relationship. They can avoid the need for a long, drawn out disciplinary or redundancy process to be engaged, or can settle any claim that you may be seeking to pursue against your employer.
Settlement agreements are widely used by many employers, as a standard approach, to avoiding or settling workplace disputes.
At TV Edwards, our Settlement Agreement solicitors provide clear, practical advice to help you make informed decisions and protect your interests before you sign anything.
What are the statutory requirements for a settlement agreement to be valid?
In order for a settlement agreement to be valid, certain conditions must be met (as set out in the Employment Rights Act 1996). These are as follows:
The agreement must be in writing.
The agreement must relate to a “particular complaint” or “particular proceedings”.
You must have received independent legal advice from a relevant adviser on the terms and implications of the proposed agreement, and on your ability to pursue any claim before an employment tribunal.
The identification of the adviser must be detailed in the agreement.
The independent adviser must have a current contract of insurance or professional indemnity insurance (which covers the risk of a claim against them by you in respect of the advice).
The agreement must state that the conditions regulating settlement agreements under the relevant statutory provisions have been satisfied.
If a settlement agreement does not comply with any of these requirements, it could be deemed to be invalid (even if the failure is seemingly only a technical one).
What claims cannot be settlement by way of a settlement agreement?
It is not always possible for an employer to use a settlement agreement to “contract out” in respect of certain types of claims.
Those types of claims that are not capable of being settlement by way of a settlement agreement are as follows (note that some of these types of claims may be capable of being settled by way of ACAS Early Reconciliation):
Any future claims for personal injury.
Any claims pertaining to accrued pension rights (except in certain limited circumstances).
Any claims in relation to a duty to consider working beyond retirement.
Any claims for failure to inform and consult, failure to pay the compensation that is equivalent to the protective award or claims for failure to provide employee liability information under the Transfer of Undertakings (Protection of Employment) Regulations 2006.
Any claims brought for failure to comply with the requirements of section 188 of Trade Union and Labour Relations (Consolidation) Act to inform and consult with appropriate representatives on collective redundancies.
Certain claims brought pursuant to the Agency Workers’ Regulations 2010.
Claims for breach of certain regulations under the Employment Relations Act 1999 (Blacklists).
Claims for breach of certain regulations of the Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015.
Any claim pertaining to the right to statutory maternity pay, statutory paternity pay, statutory adoption pay or shared parental pay.
Any claim pertaining to certain rights under the Data Protection Act 2018 (DPA), the retained EU law version of the General Data Protection Regulation ((EU) 2016/679) or the General Data Protection Regulation ((EU) 2016/679).
Should I Accept a Settlement Agreement?
Whether you should accept a Settlement Agreement will depend on your individual circumstances, the terms being offered, and what you may be giving up in return. While some agreements provide fair compensation and a clean break from a difficult situation, others may not properly reflect the value of potential legal claims or your future employment prospects.
Before signing, it is important to understand:
- How much compensation is being offered
- Whether the agreement includes notice pay, holiday pay, bonuses, or commission
- If there are restrictions on future employment
- Whether you are waiving the right to bring legal claims
- If the wording of any agreed reference is appropriate
- Whether the timescales and confidentiality clauses are reasonable
In some cases, the first offer made by an employer can be negotiated. A solicitor can advise you on whether the proposed terms are fair and whether there is scope to improve the agreement.
Our Settlement Agreement solicitors at TV Edwards can review the document, explain the legal implications in plain English, and help you decide on the best course of action before you sign.
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How Our Employment Solicitors Can Help
Our Settlement Agreement solicitors provide clear, practical advice to employees who have been offered an agreement by their employer.
We understand that these situations can feel stressful and uncertain, particularly if they arise suddenly during redundancy, workplace disputes, or the termination of employment.
We can help you:
- Review and explain the terms of your Settlement Agreement in plain English
- Advise you on whether the compensation being offered is fair
- Identify any restrictive clauses or risks that could affect your future employment
- Negotiate improved financial terms, references, or exit arrangements with your employer
- Explain the legal claims you may be giving up by signing the agreement
- Make sure the agreement is legally valid and protects your interests
Our focus is always on helping employees make informed decisions with confidence, while aiming to resolve matters as efficiently and smoothly as possible.
Why Choose TV Edwards?
- Highly ranked in legal directories – Legal 500 and Chambers UK
- Support when you need it most – clear advice during stressful workplace situations
- Specialist solicitors – experienced in workplace disputes and negotiated exits
- Strong negotiators – we work to secure fair terms and protect your interests
- Straightforward and approachable – we explain your situation without jargon
Contact Our Solicitors Today
Settlement Agreement FAQs
Do I need a solicitor for a settlement agreement?
Yes. In most cases, you must receive independent legal advice from a qualified solicitor before a Settlement Agreement becomes legally binding in England and Wales. Without this advice, the agreement is usually unenforceable. A solicitor can help explain:
- What rights you may be giving up
- Whether the compensation being offered is fair
- Any confidentiality or restrictive clauses within the agreement
- Whether there is room to negotiate better terms
What invalidates a settlement agreement?
A Settlement Agreement may be invalid if it does not meet the legal requirements set out under employment law. In order to be legally enforceable, the agreement must usually:
- Be in writing
- Relate to specific complaints or claims
- Confirm that the employee has received independent legal advice
- Identify the solicitor or adviser providing that advice
- State that the legal conditions regulating Settlement Agreements have been satisfied
An agreement may also be challenged if there is evidence of:
- Misrepresentation or misleading information
- Undue pressure or duress placed on the employee
- Fraud or dishonesty
- Unclear or ambiguous wording
How much should I expect from a settlement agreement?
The value of a Settlement Agreement will depend on factors such as your salary, length of service, employment rights, and the circumstances surrounding your exit from the business. In some cases, additional compensation may be appropriate if there are potential claims involving unfair dismissal, discrimination, whistleblowing, or breach of contract.
There is no fixed amount for a Settlement Agreement, and the first offer is not always the best one available. A solicitor can help assess whether the offer is reasonable and negotiate improved terms where appropriate.
What is the reasonable time to consider a settlement agreement?
Employees should be given reasonable time to consider a Settlement Agreement before signing it. Under the Acas Code of Practice, a period of around 10 calendar days is generally considered reasonable in standard cases.
Should you accept the first offer on a settlement agreement?
Not necessarily. The first Settlement Agreement offer made by an employer is often a starting point for negotiation rather than a final offer. In some situations, it may be possible to negotiate a higher payment, better terms, or changes to restrictive clauses before signing.
A Settlement Agreement solicitor can review the offer, explain whether it is fair, and negotiate with your employer on your behalf if appropriate.
What is ACAS Early Reconciliation?
ACAS is the Advisory, Conciliation and Arbitration Service, and in order for you to bring a claim in an Employment Tribunal, you must first engage with the ACAS Early Reconciliation process (an informal and free dispute resolution service). Without doing so, you will not be able to submit a claim to an Employment Tribunal.
During the course of the ACAS Early Reconciliation process, you will have the opportunity to explain your claim to a case worker, who will likely then (dependent upon your wishes) explain the same to your employer and then seek to see if the parties can reach an amicable agreement. The case worker will not be able to provide you with any legal advice or guidance as to the merits of your claim, they will merely try to see if the parties can reach a mutual settlement.
If an amicable resolution cannot be reached through the Early Reconciliation process, then ACAS will provide you with an Early Reconciliation Certificate and you will need the reference number on the Certificate in order to submit a claim with an Employment Tribunal.
