If you have received a settlement agreement from your employer, it can be a daunting task to decide whether to sign it.

When you are presented with a settlement agreement it is important to get independent legal advice so you understand your employment law rights and the implications of signing the agreement.

The employment lawyers at Macks Solicitors can fully advise you on your employment law rights and whether it is in your best interests to sign a settlement agreement.

Free Initial Discussion

For no-obligation advice and information, call our specialist employment team today on 01642 252 828 or use our contact form and we will call you back.

Legal Advice and Settlement Agreements

The purpose of a settlement agreement is to conclude a dispute between an employer and employee and confirm the settlement terms.

Employees should take independent legal advice before signing the document. The legal advice ensures an employee fully understands:

• The terms
• The effect of the agreement
• The employment claims they are giving up by signing the agreement  

Settlement agreements usually contain a clause stating that the employer will pay for the employee to obtain independent legal advice.

What Does a Settlement Agreement Usually Cover?

A settlement agreement will cover the issues surrounding the settlement of current or potential future legal claims and any payment of money owed to the employee by the employer.

A settlement agreement can be used to resolve an employment dispute over:

• Breach of contract of employment
• Constructive dismissal
• Discrimination
• Redundancy terms
• Unfair dismissal
• Unpaid wages
• Claims for notice pay

A settlement agreement is useful for both the employer and the employee as it provides protection for both parties. For the employer, the agreement says the employee will not start or continue Employment Tribunal proceedings. For the employee, the agreement confirms the financial settlement reached resulting in the decision being taken by the employee to not commence or to stop Employment Tribunal proceedings.

Is a Settlement Agreement Legally Enforceable?

A settlement agreement is a legally binding contract between employer and employee or former employee if conditions are met, such as:

• The agreement is in writing
• The agreement is signed by employer and employee
• The agreement identifies the issue in dispute
• The agreement specifies the terms of settlement
• The agreement confirms the employee took independent legal advice and contains details of the solicitor providing the independent legal advice to the employee

Whilst settlement agreements will differ in content depending on individual circumstances, they will normally include provisions about:

• Basis for the settlement and any warranties made or promises concerning the settlement 
• Confidentiality and reputation protection
• Employee benefits such as payment terms, including the amount and date of payment
• Handover processes, such as the return of cars, mobile telephone and other equipment or data belonging to the employer
• Restrictions on the employee, such as not working for a competitor based in the same town for a specified period 

A settlement agreement is legally binding. If breached, proceedings could be commenced. That is why it is essential that an employee understands what they are giving up by signing the agreement so they can weigh up if it is in their best interests to sign the settlement agreement.

An employee is under no legal obligation to sign an agreement and, where appropriate, our employment Solicitors can try to help you negotiate more favourable settlement terms or recommend the commencement of Employment Tribunal proceedings.

How Macks Can Help

We will thoroughly explore your case and determine the best course of action that is tailored to your specific needs.

We will discuss the funding arrangement that best suits your case and provide you with efficient, practical advice.

Contact us

For more information about settlement agreements, you can call us on 01642 252 828; alternatively, complete our online contact form and one of our employment team will be in touch.

Macks Solicitors provide comprehensive employment law advice across the country from our offices in Middlesbrough, Darlington and Redcar.