A settlement agreement (previously called a compromise agreement) is a legally binding contract that typically ends your employment in exchange for a financial payment, but prevents you from bringing claims against your employer.
These agreements are usually time-sensitive, with strict deadlines for signing. That’s why it’s important to get independent legal advice quickly – and why our team acts fast to support you.
Why have you been offered a Settlement Agreement?
Employers offer settlement agreements for various reasons, including:
- Redundancy – Instead of going through a long consultation process, employers sometimes offer a lump sum to end employment smoothly. It is also often used where employees choose to opt for voluntary redundancy to give employers peace of mind that, if they are paying an enhanced sum to the employee, that they won’t face any claims from that employee in the future.
- Unfair Dismissal or Workplace Disputes – If you’re being dismissed and believe it’s unfair, a settlement agreement can be an alternative to bringing a tribunal claim.
- Discrimination Claims – If you’ve experienced sex, race, disability, or age discrimination, employers will often offer to settle, via a settlement agreement, – to avoid legal action.
- Mutual Resignation – Sometimes, employers and employees agree that things aren’t working out and that it’s best to part ways. A settlement agreement ensures a clean exit with financial security.
You probably have many questions racing through your mind – Is this offer fair? What rights am I giving up? Can I negotiate better terms?
Our team of employment specialists can help you understand exactly where you stand and guide you through each step with clarity and confidence.
Why do you need legal advice on your settlement agreement?
The law requires you to have had independent legal advice on your settlement agreement for it to be legally binding. This is to ensure that you understand what you are signing and the rights that you are giving up.
One of our specialist employment lawyers will review your documents and provide comprehensive advice tailored to your specific situation.
We offer two main options for advice on settlement agreements, as follows:
- Basic Independent Legal Advice (minimum fee of £500 plus VAT, usually paid by employer)
This is the independent legal advice you are required to have to ensure you understand what you are signing. The fee for this is usually covered by the employer. If you are happy to accept what has been offered, we will just talk through the agreement with you to ensure you understand what you are signing, and draw your attention to any obligations or causes which appear inappropriate, are unreasonable or which could have adverse consequence for you. You can then opt to ask us to provide further advice and/or negotiate changes for you, if you wish. If you choose this option, we will not advise on whether the sum offered is reasonable unless you change your mind and specifically instruct us to do so.
- Full advice
If you are aggrieved by the way you have been treated and/or do not feel the settlement offered is reasonable, we can advise you on your legal position and whether the settlement offered is reasonable. If it isn’t, we can then seek to negotiate a more generous settlement for you and/or assist you with an employment tribunal claim, should that be necessary.
Our team of settlement agreement solicitors in Wiltshire are experts at:
- Negotiating increased settlements, where appropriate
- Protecting your professional reputation
- Ensuring payment terms are fair and tax-efficient
- Securing references and agreeing appropriate announcements
- Advising you thoroughly on the legal claims you would be giving up
- Explaining complex terms in straightforward language
- Addressing your concerns about future employment restrictions
We help clients with settlement agreements across the UK, but many people choose us for our strong local presence here in Wiltshire. With offices in key locations, including Swindon, Devizes, Marlborough and Chippenham, we’re well-placed to offer expert advice both in person and remotely.
So, whether you’re down the road or further afield, our experienced employment solicitors are here to provide clear, practical support when it matters most.
Does my employer cover the legal fees?
The cost of legal advice can be a concern for many employees. The good news is that, in most cases, your employer will offer to cover your legal fees for reviewing the settlement agreement. Here’s what you need to know:
- Employer Contribution: Employers typically contribute between £350 and £750 + VAT to cover your legal fees. This amount may vary, but it’s designed to ensure you get the independent legal advice needed for your settlement agreement to be legally binding.
- What If the Contribution Is Too Low?: If the amount offered doesn’t cover your full legal fees, we can try to negotiate with your employer for a higher contribution.
Can you negotiate a better settlement agreement?
If you’re feeling pressured to sign a settlement agreement, take a step back. You are not obligated to accept the first offer, and in many cases, you can secure a better deal.
Employers often offer a settlement agreement to protect themselves, not necessarily to give you the best possible compensation. You may be entitled to far more than you realise, but without expert guidance, you might walk away with less than you deserve. If you are concerned that the offer is not favourable enough to you, we can help you seek to negotiate a better deal.
Some examples of what can be negotiated:
- Higher Compensation – Employers often have room to increase their offer, especially if they are keen to avoid legal action. We can assess whether your payout truly reflects your situation, if you would like us to do so.
- Clearer & Fairer Terms – Some agreements contain vague or overly restrictive clauses that could impact your future employment. We make sure your settlement protects your long-term interests.
- A Positive Exit Strategy – We help negotiate references, agreed resignation terms, and tax-efficient payouts so you leave in the best possible position.
- Protecting Your Rights – We review your agreement in detail, ensuring you’re not unknowingly agreeing to restrictive obligations.
You deserve more than a rushed decision. Let us review your offer and guide you through a fair negotiation process.
