Settlement Agreement Employment

Settlement Agreement EmploymentReceiving a settlement agreement can be a complex and confusing time.

Settlement agreements are most often used to end employment relationships on agreed terms or settle disputes between employers and employees. Either way, the employee must seek independent legal advice on the terms of the settlement agreement to ensure the implications of signing are understood.

Independent advice is required as a safeguard because the settlement agreement waives your statutory employment rights.

It is important to fully understand your position and work with an expert before agreeing to any offer made via a settlement agreement. Below we cover some of the main areas and link to more detailed articles on each topic.

Being Offered A Settlement Agreement

In our experience, people receiving settlement agreements are either happy (because they want to leave the company) or it comes as a complete shock and they feel unfairly treated. However, common to both these reactions is people want the process handled quickly, but this can lead to some common pitfalls, such as forfeiting significant compensation or agreeing terms that make getting a new job more difficult.

These issues can be avoided by working with an expert in this area.

In the meantime, our Settlement Agreement – FAQs will address any burning questions.


When offered a settlement agreement, there is often scope to negotiate better terms. Generally, this can either be more money or varying the terms of the settlement agreement, by making them more favourable to your specific situation.

Having an understanding of and working with someone well-versed in How to Negotiate a Settlement Agreement can make a significant difference. This will enable you to determine if the offer is reasonable in the first place and what steps can be taken to ensure you have the best chance of leaving with a better outcome.

Settlement Agreement – Terms

When receiving a settlement agreement, people naturally focus on the monetary aspect, but the other terms can be of equal importance. Not taking the time to fully understand the Settlement Agreement Terms can have devastating consequences, such as being prevented from accepting a new and attractive job offer.

Typical Payments

A settlement agreement is used to end employment relationships and/or settle employment law disputes, which usually includes a form of payment from employer to employee. It is important to understand the types of payments that can be included in a settlement agreement and for these to be checked.

Some examples of Typical Payments found in Settlement Agreements are:

  • Notice pay.
  • Holiday pay.
  • Expenses.
  • Redundancy payment.
  • Bonus/commission.
  • Pension arrangements.
  • Ex-gratia/termination payments.

Working with an expert will ensure you are not leaving money on the table.

Settlement Agreement Calculator

If you have received an offer to leave your job, you may be tempted to search for a Settlement Agreement Calculator to check if the offer you have received is reasonable. It makes sense to check if the offer received is reasonable, but putting a few basic details into an online calculator is very unlikely to provide any useful guidance and is unlikely to be anything more than a marketing tool.

A Settlement Agreement Calculator is about as effective as trying to diagnose a complicated health issue by an internet search (both are not very good ideas).

Our ethos is very much to “diagnose before we prescribe,” and we do this by asking the right questions and drawing on our experience as experts in this field. It would be nice if you could determine the value of claims using an online calculator, but sadly, you can’t.

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