How can we assist you if you have been offered a Settlement Agreement by your employer?

What is a settlement agreement?

A settlement agreement is a legally binding agreement between an employee and an employer. The purpose of the agreement is to resolve a dispute or to terminate an employee’s employment. Settlement agreements are often used in redundancy situations or where there is a dispute between the parties.

What can you expect to see in a settlement agreement?

A settlement agreement will typically include the following clauses:

• Waiver of claims – once a settlement has been signed, an employee will not be able to pursue any claims relating to their employment or its termination against their employer, apart from specific excluded claims.
• Confidentiality – there will likely be an obligation for the employee to keep the agreement confidential apart from permitted disclosures to their immediate family and professional advisers.
• Termination/ex gratia payment.
• Warranties – these are promises made by the employee to the employer.
• Tax indemnity clause.

The above list is non-exhaustive.

Is taking legal advice a requirement?

Yes. It is a requirement, to have the agreement explained by a qualified solicitor before it is entered into to ensure the employee fully understands their rights and the implications of signing.

An employer would usually offer a contribution to an employee’s legal fees to have the agreement explained. The standard contribution amount ranges between £350 – £750 plus VAT, and the solicitor would invoice the employer directly for these fees meaning there is no cost for the employee.

At Ellis Jones, we offer straightforward and comprehensive advice. We are happy to cap our legal costs at the contribution the employer offers so employees can receive expert guidance without additional expense.

What is the process once an employee has received their agreement?

At Ellis Jones our process is as follows:

1. Receive instruction from an employee;
2. Arrange and carry out an advice meeting usually over the phone or via Microsoft Teams (approximately 1 hour);
3. Once advice has been given and the employee is content with the agreement we can arrange signing of the agreement (using an electronic signature or scanned document);
4. We will return the agreement directly to the employer;
5. We will raise an invoice directly to the employer for the legal advice given.

How quickly can Ellis Jones offer advice?

We understand that settlement agreements need to be dealt with quickly and can often offer a same day service. We can arrange a face-to-face meeting, by telephone, or online.

We deal with settlement agreements across the country on a daily basis, and therefore not only are we experienced in dealing with these kinds of agreements, but we are also able to offer flexibility in terms of how we meet with employees. We usually conduct advice over the phone or by Microsoft Teams. We understand the urgent nature of having these agreements dealt with and therefore we are able to book in appointments on the same day as your enquiry or within 24 hours should this be needed.

Contact our Employment Law team for settlement agreement support

If you have been offered a settlement agreement, please do not hesitate to contact us on settlementagreement@ellisjones.co.uk or 01202 057754 to speak to a friendly and reassuring adviser from our Employment team.