What is a Settlement Agreement?
Formerly known as compromise agreements, settlement agreements are a type of legally binding contract offered by employers to their employees with a view to terminating their employment with the business or resolving a dispute.
These contracts often include confidentiality clauses and competition restrictions, but they can vary in both length and clauses depending on the type and complexity of the settlement agreement.
Why are Settlement Agreements used?
While settlement agreements may be offered by an employer to an employee for various reasons, the most common settlement agreements are typically offered as part of a redundancy arrangement. This often involves an employee relinquishing their rights to claim against their employer in exchange for a certain sum of money.
Other reasons you might offer or be offered a settlement agreement include bringing a resolution to underlying disputes, such as an employee grievance, as well as terminating an individual’s employment following them being medically unfit to return to work or not wanting to return following maternity leave.
Put simply, a settlement agreement can help both parties to part on more agreeable terms, avoiding formal disciplinary and redundancy procedures that can be time-consuming and costly. Crucially, a fair settlement agreement can also prevent the raising of unfair dismissal claims.
How our Settlement Agreement Splicitors can help
For a settlement agreement to become legally binding, it must meet a long list of requirements.
Fortunately, the settlement agreement solicitors here at Freeman Jones Solicitors can provide unparalleled settlement agreement legal advice, helping you to create clear and legally compliant settlement agreements.
Ensuring employees receive independent, professional advice from a qualified settlement agreement lawyer during this process is a legal requirement for employers. However, hiring a solicitor for a settlement agreement from an employer’s point of view, can be just as beneficial.
Often, settlement agreements need signing, negotiating, and concluding urgently. Given our expertise and experience in this area of business law, we can usually offer urgent settlement agreement appointments and turn everything around for you within just a few days, is necessary.
To speak to one of our settlement agreements solicitors or if you have any questions regarding our legal service, please feel free to contact us today.
Alternatively, if you’re searching for ‘settlement agreement solicitors near me’, you’ll be pleased to know that you can pay us a visit at any one of our offices – we’ve opened branches in Chester, Liverpool, Warrington, and Wrexham.
Settlement Agreement FAQ's
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For employers, settlement agreement services can cost anywhere between £200-£1,500 + VAT depending on which services are required and whether you opt for a fixed or hourly rate. Typically, the employer will also pay for solicitor settlement agreement advice given the employee, too.
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Yes, a settlement agreement isn’t valid if the employee hasn’t received advice from a qualified settlement agreement solicitor.
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Alongside providing the employee with essential advice, a settlement agreement also needs to be certified by a solicitor or another kind of legal advisor to ensure the contract is legally binding.
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Most employers will pay for their employees to receive independent legal advice. In some cases, employees may be asked to pay a small contribution towards these fees by their employer.
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Every settlement agreement is dependent on the reason for the settlement. Most employers will offer greater compensation if they’re eager to avoid a damaging, expensive, and time-consuming tribunal.
Typically, however, in cases of compensation for employment termination, it’s fair for employees to request two to six months gross salary alongside any additional payments such as holiday and notice period pay.
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If you’re happy with the proposed settlement agreement, it can take just days to conclude the matter. However, if you’re not happy with the terms, renegotiation can take weeks before an agreement is reached.
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Many parts of a settlement agreement are included to protect the employer (such as confidentiality clauses). However, an agreed reference is another useful clause that many employees like to add to benefit themselves. An employment lawyer settlement agreement can provide both parties with essential legal support to ensure a mutually-agreeable settlement is reached.
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