Settlement Agreements

Your Settlement Agreement will detail the full breakdown of payments due to you, including whether any sums will be subject to tax or not. Depending on the circumstances, you may be able to secure a compensation payment as well as your contractual benefits, such as notice pay and holiday. If the compensation payment is under the £30,000 tax threshold, then it should be paid ex-gratia and free of tax.

Other financial benefits, such as pension payments and medical and life insurance will also be considered on a case-by-case basis. Non-financial compensation can include agreed references and the ability to retain certain items of company property, such as phones and laptops.

We aim to deliver a fast and efficient Settlement Agreement service to employees around the UK. Your legal fees – the money that we charge to provide advice and develop the agreement – will usually be paid by your employer, as it is a legal requirement that you obtain independent legal advice. We will advise you in detail about this before we begin work for you.

Settlement Agreements are often used as a means of resolving unhappy or unsuccessful employment or where employers agree or decide to terminate the employment of an individual. They may also be used as an alternative to a formal redundancy process.

Employees who feel they have been unfairly treated or subjected to abuse, particularly in relation to any protected characteristics – race, gender, religion, disability, age, maternity, ill health etc. – may choose to accept a Settlement Agreement. However, in these conditions our expert employment lawyers will ensure that you understand your rights and the other courses of action that are open to you, which, in these cases, may lead to substantially larger settlements.

A Settlement Agreement is a legally binding agreement between an employee and their employer, which usually terminates the employment relationship with the employee agreeing to waive their right to bring the majority of employment related claims. As a form of compensation, the employee usually receives an ex-gratia payment.