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The settlement agreement process is often difficult for employees to navigate, and they can find the whole situation quite daunting. Therefore, it can be beneficial for them to have a direct point of contact for obtaining the necessary independent legal advice before finalising and signing the agreement.

Opting for a single law firm to advise all affected employees often proves to be a quicker and more cost-efficient route.


We recognise the importance of time-sensitive settlements. Our streamlined procedures and efficient approach enable us to handle bulk settlement agreements swiftly, ensuring minimal disruption to your business operations. We provide a dedicated and responsive point of contact for seamless communication with the employer throughout the project.

Clear advice and confidentiality

We understand the sensitive nature of these situations and the impact that they can have on individuals. Our advice to affected employees is clear, confidential, and free from legal jargon, provided collectively and individually to guarantee clarity of terms and the anticipation and resolution of any issues at an early stage.


Our competitive fixed fee pricing model operates on a tiered basis depending on the number of agreements we are instructed to advise on.

Our Employment Law team consists of highly experienced solicitors with the capacity and expertise to provide independent legal guidance to affected employees on a large scale. In these situations, we collaborate with the employer to establish standard settlement agreement terms and then organise a collective and individual advisory process for the workforce.

Our experience enables us to efficiently conclude this process even under tight timeframes, offering innovative solutions such as advisory roadshows, in-person or remote workshops, and pre-recorded webinars to fulfil legal obligations promptly and efficiently.

What is a settlement agreement?

A settlement agreement, also known as a compromise agreement, is a legally binding document that outlines the terms of an agreement between your business and an employee, often in the context of ending employment or resolving a dispute.

Why might I offer a settlement agreement to an employee?

Settlement agreements can be offered for various reasons, such as addressing redundancy situations, disputes, performance issues, or situations where both parties agree to part ways under specific terms.

Can I initiate a settlement agreement with an employee?

Yes, as a business, you can initiate the offer of a settlement agreement to an employee. However, it’s crucial to approach the process fairly and ensure the employee understands their rights.

Can an employee reject a settlement agreement?

Yes, an employee has the right to reject a settlement agreement if they choose to do so. It’s important to provide them with adequate time to consider the offer and seek legal advice if needed.

Can an employee negotiate the terms of a settlement agreement?

Certainly, employees have the right to negotiate the terms of a settlement agreement. This includes discussing financial compensation, reference clauses, and other relevant terms.

What is the tax implication of settlement agreement payments?

Payments up to £30,000 as compensation for loss of employment are usually tax-free. Amounts exceeding this threshold may be subject to income tax and National Insurance contributions.

Can I include confidentiality in a settlement agreement?

Yes, you can include confidentiality clauses in a settlement agreement to ensure that both parties agree not to disclose the terms or circumstances of the agreement.

Can an employee challenge a settlement agreement after signing it?

While it’s generally challenging for an employee to challenge a signed settlement agreement, specific circumstances such as legal errors or coercion could potentially lead to challenges.

What claims can be waived through a settlement agreement?

A valid settlement agreement can waive an employee’s right to bring certain employment-related claims against your business, such as claims for unfair dismissal and discrimination.

Should I provide legal advice to the employee?

Yes, it’s legally required to ensure that the employee receives independent legal advice on the terms and implications of the settlement agreement. Your business typically covers the cost of this advice.

How long does it take to finalise a settlement agreement?

The timeline for finalising a settlement agreement can vary based on negotiation complexity and the responsiveness of all parties involved. It usually takes a few weeks to a couple of months.

Legal disclaimer

Remember, this FAQ provides general information and should not replace personalised legal advice. Customising the questions and answers to reflect your business’s practices and policies is recommended. If you have any doubts or concerns, consult with our experienced employment solicitors for tailored guidance.

Siobhan Mulrey
0121 716 7958 Email Siobhan Mulrey Connect with Siobhan Mulrey

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