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In this article Chris Hadrill, a specialist employment solicitor at Redmans, explores what settlement agreements are and gives some tips on what you should do if you have been offered one

What are settlement agreements? A quick guide

An employee has the right to bring certain claims against their employer, whether such claims can be brought under statute (for example, unfair dismissal or discrimination claims), contract (for example, a failure to pay a bonus), or tort (for example, negligence claims). Such claims may arise on the employee’s recruitment, during the course of their employment, or upon termination. In certain circumstances an employer may wish to agree to provide the employee with benefits (e.g. a payment of compensation, a reference, sometimes an apology) in return for the employee’s agreement that they will waive their right to bring such claims, or withdraw them if they have already issued a claim. This may happen where employment is continuing, but it is most common for the parties to do so where employment has terminated (or is about to do so).

Employees can only agree to settle or waive most statutory claims by one of the following means:

  • If an agreement is reached through ACAS (and recorded in a COT3 agreement); or
  • If such agreement is recorded in a settlement agreement that complies with various statutory requirements (for example, the agreement must be in writing and the employee must receive independent legal advice on the terms and effect of the agreement)

Only certain statutory claims may be settled by a settlement agreement including, among others:

  • Claims for unfair dismissal;
  • Claims for a statutory redundancy payment;
  • Claims for discrimination, harassment, victimisation or detriment;
  • Claims for detriment or dismissal because the employee has ‘blown the whistle’;
  • Claims in relation to the national minimum wage;
  • Claims in relation to unlawful deduction of wages

Until July 2013 statutory agreements of this nature were renamed from “compromise agreements” to “settlement agreements”, although it is not clear why this change was made.

What should you do if you have been offered a settlement agreement?

If you’ve been offered a settlement agreement by your employer then one of the first things that you should normally do is fine a suitable specialist employment solicitor to advise you on your agreement: your employer will normally cover an agreed level of legal fees for the advice and you must receive legal advice from an independent legal adviser on the terms and effect of the agreement for the settlement agreement to be binding. However, it is up to you to choose how much or how little work you want your solicitor to do: most employees will, in my experience, want their solicitor to handle the negotiations on the agreement as well as the advice, but in some circumstances the employee may be best-placed to negotiate the terms of the agreement themselves (for example if they have a good existing relationship with senior management handling the negotiations or if they wish to keep the costs of the negotiation as low as possible).

Why should you choose Redmans to advise you on your settlement agreement?

Redmans have advised thousands of clients on their settlement agreements, and our specialist employment solicitors have dealt with agreements worth £1,000 to settlement agreements worth over £1 million.

If you want to discuss your settlement agreement further please contact our enquiries team by telephone on 020 3397 3601 or email Redmans using the following email address: enquiries@redmans.co.uk.

About Chris Hadrill

Chris is a specialist employment lawyer at Redmans. He specialises in contentious and non-contentious employment matters, including breach of contract claims, compromise agreements and Employment Tribunal cases. He writes on employment law matters on a variety of websites, including Direct 2 Lawyers, Lawontheweb.co.uk, LegalVoice, the Justice Gap and his own blog. Contact Chris by emailing him at chadrill@redmans.co.uk

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Testimonials

4.67 Average

66 Reviews

Anonymous

As with All solicitors advice without consequence but understood and communicated my legal position

Posted 1 week ago

Anonymous

Prompt, professional and excellent service.

Posted 1 week ago

Dominic C

Excellent service, prompt and helpful

Posted 2 weeks ago

Anonymous

I found Redman’s to be very efficient and got me the best deal available in the short time scale that was available.

Posted 2 weeks ago

Victor L

Very professional. Provided excellent advice on my Settlement agreement.

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Anonymous

Professional from start to finish.

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Oliver W

Excellent service provided by Redmans, will certainly consider using again.

Posted 2 weeks ago

Melanie H

Very professional and extremely personable service. Thank you very much.

Posted 4 weeks ago

Anonymous

I found Chris to be very approachable and easy to speak with about complex matters. He took action quickly and his updates to me, as his client, were prompt. I would recommend Chris and the team at Redmans without hesitation.

Posted 4 weeks ago

Anonymous

Good advice

Posted 4 weeks ago

Anonymous

Overall happy with the service provided by Chris and Rana.

Posted 4 weeks ago

Anonymous

Chris and Rana provide a great service, very informed, diligent and care about your result, would recommend Redmans

Posted 4 weeks ago

David W

A speedy efficient friendly service, I would definitely recommend Redmans Solicitors for processing Settlement Agreements.

Posted 4 weeks ago

Anonymous

Both Rana and Chris were fantastic. From the first phone call I was confident my matter was in good hands. I was not disappointed. I would highly recommend Redmans. Thank you again for all of your support and advice.

Posted 1 month ago

Federico S

Great advices and communication. Through Redmana I obtained match more than what I thought. Highly recommended

Posted 1 month ago

Tom G

A good and efficient service with the required legal advice provided for a settlement agreement.

Posted 1 month ago

Francis T

The solicitor I used was Chris Hadrill, who I found extremely professional and I felt that he made me feel at ease, considering the subject matter he was assisting me with.

Posted 1 month ago

Anonymous

Chris provided excellent assistance with the negotiation of my settlement agreement. From start to finish, I was consitently updated and advised on the best course of action to take. I would highly recommend Chris and Redmans Solicitors.

Posted 1 month ago

Anonymous

They are busy people but manage well so generally I would recommend them.

Posted 1 month ago

Anonymous

Very efficient and professional service from my first phone call making an enquiry. Timescales of the matter in hand were met and within the agreed budget. Would highly recommend Redmans

Posted 1 month ago

Lisa B

Really very good service, always available to answer questions, provide my with any information I needed to make informed decisions.

Posted 1 month ago