Settlement agreements

A settlement agreement, previously known as a compromise agreement, is a legally binding contract between an employer and an employee. It is often used to help employers and employees bring an employment relationship to an end on agreed terms and avoid the stress and uncertainty of an Employment Tribunal claim.

Our solicitors have considerable experience advising both employers and employees on settlement agreements throughout Thanet, Canterbury and across Kent. Whether you are offering or being offered an agreement, we can ensure that the document is legally sound and that your interests are fully protected.

To be legally valid, a settlement agreement must:

  • Be in writing
  • Be voluntarily entered into and signed by both parties
  • Specify the particular claims it is settling
  • Confirm that the employee has received independent legal advice from a qualified, insured adviser

Our solicitors will ensure that every legal requirement is met so that your agreement is enforceable and provides certainty for the future.

Settlement agreements for employers
Reaching a settlement agreement with an employee can help you avoid the cost, disruption, and reputational risk of an Employment Tribunal claim. Even where you believe an employee’s claim has little merit, a properly negotiated settlement can be far less costly and time-consuming than defending proceedings.

Our team can assist you by:

  • Drafting or reviewing the settlement agreement
  • Setting out clear terms of departure
  • Including appropriate confidentiality and non-derogatory clauses
  • Advising on reference wording, timing of departure, and return of company property
  • Confirming an appropriate contribution towards the employee’s legal fees

Settlement agreements are confidential, allowing both parties to resolve matters privately and preserve goodwill wherever possible.

Settlement agreements for employees
If your employer has offered you a settlement agreement, you must take independent legal advice before signing it. This is a legal requirement and ensures that you fully understand what you are agreeing to and what rights you are giving up.

Our solicitors will:

  • Explain every term of your settlement agreement clearly
  • Ensure that the compensation offered is fair and properly reflects your circumstances
  • Negotiate improved terms if necessary, for example, to secure a positive reference or extend confidentiality protection
  • Advise you on whether you may have stronger grounds for a Tribunal claim

In many cases, your employer will contribute towards or cover your legal fees for this advice.

Why choose our settlement agreement solicitors?
We act for both employers and employees, giving us a well-rounded understanding of the concerns on both sides. This insight helps us to take a practical, balanced approach aimed at achieving swift and cost-effective solutions.

Our experience includes advising on settlement agreements involving:

  • Redundancy
  • Unfair or wrongful dismissal
  • Constructive dismissal
  • Discrimination and harassment
  • Pay and bonus disputes
  • Grievance and disciplinary procedures
  • TUPE (Transfer of Undertakings) situations

We will ensure that your settlement agreement is drafted correctly, complies with employment law, and gives you peace of mind that the matter is fully resolved.

Contact us
To speak to one of our employment law solicitors about a settlement agreement, please call 01843 234000 or contact us online using the form on this page for initial advice or to arrange an appointment.