Settlement Agreements

Whenever the relationship between an employer and an employee breaks down, for whatever reason, one solution available is for the parties to enter into a Settlement Agreement. This is a legal document which provides for an employee to receive a lump sum payment, which is tax free up to £30,000, in return for their agreement not to bring a claim against that employer in the Employment Tribunal.

A Settlement Agreement must be in writing to be valid, and contain certain clauses to ensure that it complies with the conditions which govern such agreements. The employee is also required to have received independent legal advice on such a proposed agreement from a qualified person, such as a solicitor.

We are experienced at advising employees of all levels in connection with Settlement Agreements, and are able to explain the terms in plain English, so that an employee is fully aware of what they are agreeing to. In a high number of cases, we have been able to obtain an improved settlement for our clients than that originally offered by the employer.

Furthermore, Settlement Agreements usually provide for the employer to make a contribution towards the employee’s legal fees, and in the vast majority of cases, this is sufficient to cover our fees. However, this is dependent upon the level and nature of negotiations required in each particular case.

We appreciate that the terms of settlement are crucially important to both parties, and will work on your behalf to ensure that you receive the best settlement available.

If you would like Holdens to advise you in relation to a proposed Settlement Agreement, please contact either Peter Rutherford or Daniel Hutton at our Lancaster office. They will be happy to discuss the matter further with you, and make the relevant arrangements.