Rebecca Bennett

Solicitor

DATE PUBLISHED: 31 Mar 2022 LAST UPDATED: 23 May 2022

Settlement Agreements – 5 things you need to know.

  1. Settlement Agreements are offered on a without prejudice basis

This means that the conversations regarding the offer of a settlement agreement and the agreement itself is considered ‘off the record’ and cannot be referred to in any open HR process or any future litigation.

Once the settlement agreement is signed it is then treated as an open binding document.

  1. There is a legal requirement for the settlement agreement to be explained by a relevant adviser

A settlement agreement brings employment to an end and includes a number obligations that you will need to seek advice on. You will also be agreeing to waive your rights to claims against your employer. It is a requirement to obtain advice from a relevant adviser on the terms and effect of a settlement agreement in order for the settlement agreement to be considered legally binding.

  1. It is possible to negotiate on the terms of a settlement agreement

There may be scope to negotiate further with your employer on the terms of the settlement agreement if you are not happy with what has been offered to you.

To negotiate on a settlement agreement you will need some form of leverage which could include the threat of potential employment tribunal claims or the fact that your employer will need to carry out a lengthy HR process as an alternative to entering into a settlement agreement. The realities of having to deal with these processes, including the cost, often draws employers into negotiating further.

  1. Your employer normally contributes towards your legal costs

Normally employers offer a contribution towards your legal fees for having the agreement explained to you. This should be set out in the settlement agreement itself.

  1. Confidentiality clauses are typically included

There may be a clause which prevents you from disclosing information regarding the settlement agreement and prior conversations apart from to your immediate family, anyone who owes you a duty of confidentiality (i.e. legal or medical professionals) or for the purposes of complying with a legal obligation.

A clause preventing you from making any derogatory comments about your employer is also often included.

Both clauses can be mutual i.e. they can also apply to your employer.

How can we help?

We offer an advice and sign off service whereby we are willing to cap our fees at the costs contributed provided by your employer. This means that you will not need to pay us anything.

Alternatively, we offer a negotiations service whereby we will advise you on the merits of your offer and where we consider that you could negotiate further, we will inform you of this and are happy to negotiate directly with your employer on your behalf.

If you would like us to negotiate, we will try to build this time into the costs contribution. If this is not possible, we will agree in advance with you either a no-win, no-fee or a fixed fee to negotiate.

If you would like to have a free initial chat or would like to book an appointment, please contact us at  settlementagreement@ellisjones.co.uk or telephone 01202 525333.

How can we help?

When you submit this form an email will be sent to the relevant department who will contact you within 48 hours. If you require urgent advice please call 01202 525333.

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