A settlement agreement is a legally binding document used to waive all employment related legal claims, usually in return for a sum of money and the termination of your employment.
Settlement agreements can be useful if you want to avoid the stress, risk and cost of legal proceedings, but of course, your employer would have to be in agreement. It should enable you to make a clean break from your company, potentially with an approved reference and a lump sum payment.
Not sure about a Settlement Agreement?
Is it in your best interests to sign one? We will look at any possible legal claims you may have, and the potential to negotiate an increase in the amount of money on offer.
Employment Law Advice for Settlement Agreements
For a settlement agreement to be legally binding, you must seek independent legal advice from a relevant expert, such as one of our employment law specialists at Taylor Emmet. Your employer will usually offer a contribution to your legal fees, which generally covers the cost of the advice given on the terms of the agreement.
We provide varying levels of advice to employees about settlement agreements. This includes whether it is in your best interests to sign one, including looking at the possible legal claims you may have, and the potential to negotiate an increase in the amount of money on offer.
Settlement agreements are “without prejudice” and “subject to contract.” This means you are generally free to withdraw from negotiations at any time, up to the point you sign, without adverse consequences and you will retain the option to bring legal proceedings. Any claims for latent personal injuries or accrued pension rights are not normally waived and you are free to pursue them in the future, depending on the wording of the settlement agreement, if it becomes necessary.
Settlement agreements must be made in writing and relate to a particular complaint (potential or actual) or specific legal proceedings. Your solicitor will confirm that a certificate of insurance is in place covering the advice given and that all other conditions regulating the agreement have been satisfied.
What is in a Settlement Agreement?
As well as a settlement payment, settlement agreements often include a reference and may include an agreed announcement to be made about your departure from your employer.
Often the first £30,000 paid under a settlement agreement will not be taxed. If you are worried about exercising any share options in the future, we can discuss this too.
The law allows employers to have “protected conversations” with staff about the prospect of terminating their employment using a settlement agreement, without fear that the content will be used to support a constructive dismissal claim. There is still plenty of scope, however, for employees to say the conversation does not attract “protected” status as the employer acted improperly or in a discriminatory manner.
Paying for your Settlement Agreement
For a settlement agreement to be legally binding, you must seek independent legal advice from a relevant expert. Your employer will usually offer a contribution to your legal fees, which generally covers the cost of the advice given on the terms of the agreement.
There are a number of ways in which we can help you resolve an employment law dispute with your employer, or pursue a claim against an organisation in the employment tribunal or civil court.
We can help you acheive this in one of the following ways:
No Win No Fee
We offer No Win No Fee assistance on a case by case basis. This means that we would to assess your settlement agreement and your individual circumstances.
If you would like to have your case assessed our employment law advisers will find out a little more about your claim before passing this on to our specialist team who will confirm whether or not we can assist you on a No Win No Fee basis.
Fixed Price Employment Law
If we are unable to offer a free advice meeting or assist you on a No Win No Fee arrangement, for a fee of £150 plus VAT we can provide an initial face to face meeting to discuss your employment concerns and identify the steps you can take to resolve these. For that fee we would consider documentation you have received from your employer and following your consultation provide you with advice explaining the options you have available.
Hourly Rate
A solicitor’s hourly fee reflects their level of experience and seniority. Paying a solicitor on an hourly rate to deal with the whole of a claim in the tribunal or court is the most traditional method of funding. It secures you comprehensive assistance from day one, but you will need to consider whether the cost of proceeding with a claim outweighs the value of it.
