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Settlement Agreements

(known as a Compromise Agreement until 29th July 2013)

A Settlement Agreement is an agreement between you and your employer setting out an arrangement that by being paid a certain sum of money you will not make an Employment Tribunal claim against them in the future.

This means that you receive compensation by signing the Settlement Agreement and your employer has the certainty that a claim will not be made against them.

We ensure that the terms of the Settlement Agreement are correct and that you are receiving the correct settlement given your circumstances.

The Settlement Agreement will usually be a lengthy document setting out what payments you will receive and what they relate to. It will also set out what parts of the settlement will be taxed and what will be paid to you tax free.

Often the Settlement Agreement will have confidentiality clauses in it to ensure that you agree to keep your employer’s business affairs private.

Sometimes the Settlement Agreement will be written to include an agreed reference ensuring you have no difficulties in obtaining one when looking for new employment. This gives you the certainty that you have a good chance of getting a new job.

The Settlement Agreement will have a number of other clauses in it which we will go through with you so you understand what you are signing.

 The advantages of Settlement Agreements:

  • They avoid the costs of employment tribunal proceedings;
  • Set out terms agreeable to both you and your employer;
  • Give you the certainty of a settlement sum.