Settlement agreements

If you have been asked by your employer to sign a settlement agreement, you will need to seek expert advice to make it legally binding. 

Signing these documents can have a number of implications, so it's important that you turn to a settlement agreement solicitor who can offer legal advice and make sure that you negotiate the best terms from the agreement. 

Why have I been asked to sign a settlement agreement?

Settlement agreements could be proposed to end a dispute, or when a worker's employment is being terminated. If you have been asked to sign one, it should be written into the document that a worker offered such an agreement should obtain advice from an independent advisor before signing the agreement and that the party with whom the agreement is being made should meet the costs of the worker getting that legal advice.

“I’m so thankful for the support I received from my trade union and Thompsons.” Angela, trade union member

How Thompsons' trade union solicitors can help

If your employer has asked you to sign a settlement agreement, Thompsons’ trade union solicitors can assist. We have decades of experience helping those who need to sign a settlement agreement to understand the terms offered and negotiating the best outcome for union members.

To begin the process, contact your union representative for more information.

Frequently asked questions about settlement agreements

1. I’ve been asked to sign a settlement agreement – what is it?

A settlement agreement is a legally binding contract used by employers to resolve an employment dispute with an employee.
The document sets out the terms and conditions that the employer wants the employee to agree to and sign. In many cases, signing a settlement agreement will see the employee receive a payment, on the basis that by doing so they give up their legal right to start a claim about the issue that is the subject of the agreement.

2. What type of terms are usually included in a settlement agreement?

The terms outlined in your settlement agreement typically include clauses on:

  • Termination date and the reason for termination
  • Waiver of rights to claim
  • The final compensation amount you will receive
  • The notice period you are entitled to and if it will change
  • Any outstanding payments, including bonus, salary and holiday entitlement
  • Any terms that limit applying for new jobs
  • The terms that apply if either you or your employer breach the agreement.

Our trade union solicitors can go through the document with you and negotiate the best terms with your employer.

3. Can I agree to the terms of a settlement agreement on my own?

No. By law, individuals who sign a settlement agreement need to have legal advice from a qualified lawyer so they know what the document means. Without this, the agreement is not legally binding.

In going through the agreement with you, a settlement agreement solicitor is looking to ensure you are getting a reasonable deal and will advise you on what you should do if you are not and start a negotiating process.

4. How much will a settlement agreement cost me?

It's commonplace for the employer to offer to pay the cost of you getting independent legal advice. We will be paid what your employer is specified as having to pay within the agreement, and any costs that are greater than that would be met by your union. For more information about fees and payment, contact your trade union representative who can talk you through the process.

5. What happens if a settlement agreement is breached?

A settlement agreement is a legally-binding contract, so if the employee attempts to pursue legal action about the issue that is the subject of a settlement agreement, the employer can refer to the agreement in defence. Equally, if the employer fails to pay the agreed funds, the other party can take them to court for breach of contract.

6. What's the difference between a settlement agreement and redundancy?

A settlement agreement is a document signed by the employee, which means they agree to waive their rights to bring a claim against their employer. A settlement agreement is usually signed in return for payment of money to recognise the employee has waived their rights. Redundancy is different as it usually means that the employee’s work is no longer needed. For an employee who is in a redundancy situation, they must go through a certain procedure and they have a right to appeal.

7. Why should I choose Thompsons Trade Union Solicitors to help me?

At Thompsons Solicitors, we have a dedicated team of settlement agreement solicitors who support union members through the process of a settlement agreement. Our primary focus is to help you to negotiate best deal when it comes to settlement agreements.

If you are seeking settlement agreement advice, call us on 0800 5877 530, or contact your union representative for more information. Alternatively, you can begin the process by completing our settlement agreements form.

 

Not a trade union member?

Visit the Thompsons Law website to find out more about getting legal advice from our settlement agreement solicitors.