Settlement agreements

Settlement agreements services for employees

When an employment relationship ends, a settlement agreement may be offered to prevent future disputes. If you’re offered a settlement agreement, it’s crucial to seek independent legal advice to ensure the terms are fair and your rights are protected.

What is a settlement agreement?

A settlement agreement (formerly known as a compromise agreement) is a legally binding contract between an employer and employee. It outlines the terms on which the employee will leave the company, typically including compensation and other benefits in exchange for agreeing not to bring any claims against the employer, such as for unfair dismissal or breach of contract.

Key Stages of a settlement agreement case:

Our service covers all aspects of your settlement agreement, from initial consultation through to finalising the deal. Here’s what you can expect from us:

Stage 1 – Initial consultation & case assessment

We’ll start with a phone call to gather the details of your situation and provide preliminary advice based on the settlement agreement offered by your employer.

Stage 2 – Comprehensive legal advice

We provide you with detailed written guidance, explaining the terms of the settlement agreement, including any financial settlement, restrictive covenants, and other key clauses.

Stage 3 – Finalising the agreement

We’ll arrange for you to visit our offices to sign the agreement, ensuring that all legal formalities are properly completed.

Stage 4 – Employer communication

We will handle sending the signed documents to your employer, ensuring a smooth and timely exchange of paperwork.

Stage 5 – Completion & finalisation

After finalising the agreement, we will issue an invoice and provide your employer with a concluding letter, along with instructions for completion.

Stage 6 – Post-agreement follow-up

We conclude the process by sending you a final correspondence, ensuring that all matters have been fully resolved and offering any further support if needed.

How long does processing a settlement agreement take?

The timeline for processing a settlement agreement can vary depending on its complexity. For most simple agreements, where no amendments or negotiations are needed, we aim for a turnaround time of 7 days. This includes providing legal advice, finalising the documents, and communicating with your employer.

If you’re working to a tight deadline, we can often accommodate faster timelines, prioritising your case to meet your specific needs. Just let us know if your situation is urgent, and we’ll do our best to expedite the process.

However, in more complex situations—such as when further negotiations are required or if there are amendments to restrictive covenants or non-disclosure clauses—the process may take longer. In these cases, we will provide a clearer estimate once we’ve reviewed the agreement and discussed any additional work required. Rest assured, we will keep you informed at every step and aim to complete the process as efficiently as possible.

Why might you be offered a settlement agreement?

While settlement agreements can offer a clean break for both employer and employee, it is essential to seek professional advice to ensure that your best interests are represented. Our employment law solicitors with expertise in settlement agreements will ensure that you’re protected and guide you through the entire process.

There are several reasons why an employer might offer a settlement agreement. Typically, it’s used in situations where both parties wish to avoid the potential stress and cost of a legal dispute, such as in cases of:

Redundancy

When your role is no longer needed, and your employer offers a financial package to avoid redundancy claims.

Mutual agreement

If the employment relationship has broken down, and both parties agree that it’s time to part ways.

Performance issues

Where ongoing issues have led to discussions about termination, but both sides want to avoid the formal disciplinary route.

Restructuring or business changes

When a business undergoes structural changes that lead to role eliminations or shifts in job functions.

What does a settlement agreement include?

A settlement agreement is more than just a financial package – it’s a comprehensive document outlining the terms on which you’ll leave your employer.

Given the complexity of settlement agreements, it’s essential to review all terms thoroughly, particularly around references and post-employment restrictions. The right advice can make all the difference in securing terms that protect your interests and set you up for future success.

Here’s a closer look at the key elements often found in a settlement agreement:

Termination date

This specifies the last day of your employment. It’s essential to ensure that the date reflects any outstanding holiday pay or notice period you’re entitled to.

Financial settlement

This is usually the main attraction of a settlement agreement. It may include redundancy pay, compensation for loss of employment, and any outstanding payments such as bonuses or commission. The amount offered will vary depending on the circumstances, and we can help ensure that the offer reflects your legal entitlements.

Non-disclosure clauses

These clauses prevent you from discussing the details of the agreement or the circumstances of your departure with others, particularly future employers or colleagues. While these are standard, they should not prevent you from disclosing key information to your family, legal advisors, or regulatory authorities. We’ll help you understand exactly what you can and cannot say.

Post-employment restrictions

Often referred to as restrictive covenants, these are clauses that limit what you can do after leaving your employer. They may prevent you from working for a competitor or contacting former clients or colleagues for a set period. It’s crucial to review these carefully, as they can have a significant impact on your career. If your settlement agreement includes garden leave – a period where you’re still employed but not required to work – it’s important to ensure you understand your rights and responsibilities during this time.

Confidentiality Clauses and Non-Disclosure Agreements (NDAs)

Settlement agreements often include clauses that require you to keep certain information confidential, including trade secrets or company information. These clauses can impact your ability to work in the same sector or role, depending on the specifics. Our employment solicitors with expertise in settlement agreement will explain these terms clearly, ensuring you are aware of any limitations and how they may affect future employment opportunities.

Fees for settlement agreement advice

We believe in being upfront about the costs involved in advising on settlement agreements, so you know exactly what to expect. Our standard fees for reviewing and advising on settlement agreements typically range from £500.00 plus VAT and upwards. In most cases, your employer will cover these fees as part of the settlement, meaning there’s no cost to you.

However, if additional services are needed—such as negotiating amendments to the agreement, revising complex documents like non-disclosure agreements, or addressing post-termination restrictions— our fees are charged at an hourly rate which is dependent on the experience and seniority of the Solicitor handling your case. These services may be required if your employer’s offer doesn’t meet your expectations or if further legal work is needed to secure a better outcome. We will always discuss this with you in advance, so there are no surprises.

At Anthony Gold, we offer personalised advice tailored to your situation, ensuring you walk away with a fair deal and peace of mind. With years of experience in handling settlement agreements, we’ve helped employees, senior executives, and professionals navigate complex exit arrangements with confidence.

 

Contact us

If you’ve been offered a settlement agreement or need advice on your exit package, speak to one of our employment law solicitors. Contact us today on 020 7940 4060 or at mail@anthonygold.co.uk for expert settlement agreement advice.

Words from our clients

I dealt with Joy Drummond who advised on a settlement agreement with my employer. She was thorough, clear and acted quickly, including in taking account of my specific concerns and circumstances. Excellent service all round.

Our Client

Joy Drummond at Anthony Gold was exceptionally thorough and professional when she managed my recent settlement agreement. I’ve worked with many law firms over the course of my career and have no hesitation in recommending Joy.

Our Client

Aneil was professional, upfront and acted speedily whenever I requested help. We got a good outcome in settlement agreement negotiations which I feared would be messy. It was the first time I found myself needing to rely on an employment solicitor. In future, he will be the first person I call

Our Client

Firstly, I really would like to thank Anthony Gold and more importantly Aneil. I had to do a settle agreement with my company which was a very daunting experience for me, but Aneil made it seem like a very easy and simple process. If you want someone to give you the solid advice and have your best interests at heart, then I would definitely recommend Aneil and Anthony Gold.

Our Client

Speak to a member of the Employment team

Settlement Agreements for Employees: FAQs

Why should I let Anthony Gold Solicitors handle my settlement agreement?

Get the advantage of 70 years of experience in employment law and settlement agreements. Our specialist negotiators and litigators are accredited by the Solicitors Regulation Authority and ranked in the Legal 500 and Chambers and Partners directors. They know employment law inside and out. And they know how to make the process fast, painless and straightforward for you.

Do I need to take legal advice for a settlement agreement?

Employees are legally required to take independent, qualified advice on the terms and effects of the settlement agreement. Advice from a specialist in employment law is key to understanding what the settlement agreement includes, whether anything is missing, and whether you should accept the offer or seek better terms.

Does the employer pay for my legal advice?

Since independent legal advice is required for the settlement agreement to be binding, employers pay the cost in most cases. In the first instance, your employer may offer a contribution toward your legal fees, rather than the full rate. This can usually be increased through negotiation by a qualified employment law team.

What are the benefits of signing a Settlement Agreement?

The main advantage of a signed settlement agreement is that you’ll typically get a lump sum payment. This is above and beyond any amount you would usually receive, including notice pay. Generally, this lump sum is tax free up to £30,000.

How do I negotiate for better terms?

Negotiations can be challenging, but a specialist in employment law can work on your behalf, using experience from across similar agreements. An employer’s first offer is a starting point – and rarely the final position. An employment lawyer can use experience, knowledge and proven tactics to support your negotiation. Ultimately, the negotiation potential will be determined by the potential claims you have, the quality of your initial offer, and whether any negotiation has already taken place.