Compromise or Settlement Agreements

Chattertons’ team of specialist employment solicitors are dedicated in protecting the rights of employees in the face of redundancies and dismissals. Boasting vast experience in this often-complex area of law, you can rely on our solicitors to help you determine whether the terms of a Settlement Agreement are fair and representative of your needs and performance in the company.

Why choose Chattertons for Compromise & Settlement Agreements?

Employees have various rights including the right not to be discriminated against on protected grounds (such as sex, race, disability, religion or age) and the right not to be unfairly dismissed. When clients come to Chattertons seeking advice on employment law, our priority is to protect these rights and ensure their interests are being looked after. This is especially important in Settlement Agreements, as signing this legally binding document prevents an employee from claiming compensation through a Court.

When you instruct one of our expert employment law solicitors, we will explain the terms of the Settlement Agreement in plain, jargon-free English, allowing you to decide whether the financial incentives on offer are reasonable. If we identify any potential claims, we understand how Employment Tribunals and Courts calculate compensation so we can help you to reach an informed decision about the Settlement Agreement.

As well as in-depth knowledge in the field of employment law, our solicitors are well renowned for our commitment to client care. The core of our values and philosophy is to deliver a service that’s client focused; so if there is anything more we can do after securing a fair outcome for the termination of your employment, let us know.

What is a Settlement Agreement?

A Settlement Agreement (previously known as a compromise agreement) is a legally binding contract used to end an employment relationship on agreed terms. They usually include some form of payment to the employee as compensation for terminating the contract early.

Settlement Agreements are used in many circumstances, including:

  • Redundancy
  • Transfer of Business
  • Performance management
  • Long-term sickness
  • To settle a workplace dispute

If an employer and an employee are unable to reach a decision on the terms of the agreement, our solicitors will assist you through negotiations or court proceedings where necessary.

Should I sign a Settlement Agreement?

By signing a Settlement Agreement, an individual is no longer able to make claims to the court regarding compensation for unfair dismissal. Therefore, the most important aspect of the Settlement Agreement is the amount of compensation your employer is prepared to pay for you to waive your legal rights. In order to decide whether or not the sum is sufficient, you need to understand how an Employment Tribunal calculates compensation.

The legal system is designed to protect you from signing away valuable employment rights that you may not fully understand. Therefore, in order for a Settlement Agreement to be valid, the employee must gain independent legal advice about the terms and effects of the agreement. Usually, the employer will make a contribution towards the employee’s legal costs.

If you are unsure as to whether the amount of compensation your employer has proposed in a Settlement Agreement is an accurate representation of your loss or suffering, get in touch with our specialist team of employment solicitors. We will assess the offer and advise you on your potential entitlements if you decide to bring an employment tribunal claim rather than accept the sum on offer. 

Our employment solicitors can also assist you in negotiating more favourable terms if you still wish to proceed with the Settlement Agreement.

How much compensation should my employer offer in a Settlement Agreement?

Generally speaking, the compensatory award offered in Settlement Agreement will be based on financial losses. If you are unfairly dismissed, the amount of compensation you receive will be based on your loss of earnings. In addition, you will be entitled to receive a basic award based on your salary, age and length of service. This is very similar to the amount of statutory redundancy which is payable if you are made redundant.
However, if you have been the victim of workplace discrimination, you may be entitled to compensation for injury to feelings, based on the seriousness of the discrimination and the length of time you faced this discrimination.

For specialist advice on Settlement Agreements, please contact our team of employment law solicitors at Chattertons today via phone or our online enquiry form.