Employment Law

Employee Settlement Agreement

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Employee Settlement Agreement

Formerly known as compromise agreements, a Settlement Agreement is a legally binding contract between employer and employee which settles claims that the employee may have against their employer. It usually means that the employee will give up the right to bring any kind of tribunal claim against the employer in return for a severance payment.

If you have been offered a Settlement Agreement by your employer, you must get independent legal advice. Otherwise, it’s not valid.
Our Employment Team are highly skilled with a vast range of knowledge and experience, get in touch with one of our Settlement Agreement Solicitors today to get the process started.

There are many differing names and terms to refer to Settlement Agreements these include:

However, the correct legal term is ‘settlement agreement’.

Do I need a Solicitor?

In short, yes. It is essential that the Settlement Agreement records all the specific relevant claims or complaints that the employee is waiving. Settlement agreements often state that they waive every employment claim that exists at law but without specifics this is unlikely to be valid.


The Agreement is only valid if:

What are the benefits of a Settlement Agreement?

A common misconception is that a Settlement Agreement will always result in the employment being terminated. This is not always the case and some employees may settle a dispute with their employer in this way and then remain in their employment.
For more information on Settlement Agreement or for specialist employment law advice, please get in touch.

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