Settlement Agreements

Settlement Agreements are legally binding contracts which can be used to end the employment relationship on agreed terms.

By signing a Settlement Agreement you will waive your right to make a claim to the Employment Tribunal or to a court on the items covered in the Settlement Agreement. ( Basically the Settlement Agreement will list the things that you cannot claim for.)

The employee will usually receive a payment from the employer.

For a Settlement Agreement to be binding:

  • The agreement must be in writing
  • It must specify the claims covered by the agreement (i.e. those which cannot be brought)
  • The employee must have received advice from a relevant independent adviser
  • The independent adviser can be a qualified lawyer, a certified and authorised official, employee or member of an independent trade union, or a certified and authorised advice centre worker.
  • The independent adviser must have relevant insurance to cover the risk of a claim by the employee in respect of loss arising from the advice.

Settlement Agreements are voluntary. If you are presented with a Settlement Agreement by your employer, it makes sense to take professional advice to cover your specific set of circumstances.

The rules in relation to Settlement Agreements are complex and too lengthy to list here.

To take advice, contact one of our specialist employment solicitors:

Kate Johnson on 01827 317063 or

Peter Brady on 01827 3170775