Disciplinary and Grievance
Guidance for employers managing disciplinary, performance, and grievance processes fairly.
EMPLOYMENT LAW
Settlement Agreements
SPECIALIST EMPLOYMENT LAW SERVICES
Ending employment with certainty and protection
Dedicated advice for employers on settlement agreements – drafting and negotiating terms that protect your business when employment comes to an end.
A settlement agreement gives your business certainty that the departing employee will not bring claims against you. Our expert employment team advises on when an agreement is appropriate and prepares all the necessary documentation.
Drafting agreements
We draft settlement agreements that are clear, legally sound and protect your business from future claims.
Advising on risk
We advise on the likelihood of any claim and the appropriate level of payment to offer.
Redundancy exits
Settlement agreements are commonly used at the end of a redundancy process to give both parties certainty.
Confidentiality clauses
We include appropriate confidentiality and non-disparagement provisions where these are in your business's interests.
Supporting managers
We advise HR teams and managers on how to approach exit conversations correctly.
EMPLOYMENT LAW EXPERTISE
Certainty when employment ends
When employment ends, whatever the circumstances, a settlement agreement gives your business protection against future claims. By signing the agreement, the employee gives up their right to bring claims in exchange for an agreed payment.
The appropriate level of payment depends on the circumstances and the strength of any potential claim. We advise on the risk and the commercial case for a settlement, and prepare all the documentation.
Drafting and reviewing agreements
We draft and review settlement agreements, ensuring the terms are clear, the correct claims are covered, and the agreement will be enforceable.
Redundancy and dismissal settlements
Settlement agreements are commonly used at the end of a redundancy process or following a dismissal, giving both parties a clear and agreed resolution.
Risk assessment and payment advice
We advise on the risk of any potential employment claim and the appropriate level of financial settlement to offer, helping you reach a cost-effective resolution.
OUR SERVICES
Related Services
Our employment law team covers a broad range of employment law services. Explore the related areas below to find out more.
Employment Contracts
Support drafting and reviewing employment contracts that protect business interests.
Fosters HR
Flexible HR and employment law support for businesses needing practical guidance.
HR and Advisory Support
Ongoing employment law advice for employers managing day to day HR issues.
Redundancy
Advice for employers planning redundancies, consultations, restructures, and settlement risks.
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OUR CREDENTIALS
Settlement agreement expertise for employers
Our employment team advises businesses of all sizes on settlement agreements, helping you achieve a clear and certain resolution when employment ends. We hold Lexcel accreditation and the Customer Service Excellence quality mark. Our advice is practical, clear and focused on protecting your business.
Lexcel accredited
Law Society quality standard for legal practice management, held for over 10 years.
Customer service excellence
Holders of the national quality mark for outstanding client care.
Fosters HR
Our fixed-fee employment service gives you expert employment advice at a predictable monthly cost.
FAQs
Settlement Agreements FAQs
A settlement agreement is a legally binding contract between an employer and an employee that brings employment to an end on agreed terms. As part of the agreement, the employee waives their right to bring employment claims against the business, typically in exchange for a financial payment.
Settlement agreements can only be entered into voluntarily, and the employee must receive independent legal advice before signing. We advise employers on drafting and negotiating settlement agreements and can coordinate the process.
A settlement agreement can be used whenever employment is ending, whether as a result of redundancy, a disciplinary process, a mutual agreement, or any other circumstance. They are particularly useful where you want certainty that the departing employee will not bring claims, or where you are offering an enhanced payment above the employee’s contractual entitlement.
We advise on whether a settlement agreement is appropriate and whether the timing is right.
The payment under a settlement agreement is a matter for negotiation between you and the employee. Where you are confident that the employee has no claims against the business, the payment is likely to be modest. Where there is a risk that the employee could bring a successful claim, you may wish to offer more to achieve certainty.
Payments up to £30,000 can in some circumstances be made free of income tax, though this depends on the nature of the payment. We advise on the appropriate level of payment for your situation.
Yes. A settlement agreement is only valid if the employee has received independent legal advice on its terms and effect before signing. This is a legal requirement. The advice is usually provided by a solicitor, and the employer typically contributes towards the employee’s legal costs.
We draft settlement agreements that include the necessary provisions and can advise on standard contributions towards employee legal costs.
A settlement agreement can be drafted to cover a wide range of potential employment claims, including unfair dismissal, wrongful dismissal (dismissal in breach of your employment contract), redundancy, discrimination claims and breach of contract. It must specify the individual claims being waived to be legally effective.
We advise on which claims are relevant in your situation and ensure the agreement covers the necessary ground to give your business the protection it needs.
Meet our business employment law team
Our team of business employment law lawyers is comprised of compassionate and skilled legal professionals dedicated to supporting you through the most sensitive and personal legal matters.
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