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Settlement Agreements

Your Trusted Legal Advisor

As your trusted legal advisor, the solicitors at Wilford Smith can provide specialist advice and representation on settlement agreements regardless of the size of your business. From simple, pre-agreed settlements to those incorporating complex arrangements such as structured payments and share options, our employment solicitors deliver clear, pragmatic advice to help you resolve an employment dispute as quickly and cost-effectively as possible. By instructing us, you can be confident of having the support of a team of specialist employment law solicitors who can offer invaluable insight to ensure that you are fully compliant with the law surrounding settlement agreements.

Wilford Smith was founded over 30 years ago and is now considered one of the UK’s most prestigious law firms, having developed a richly deserved reputation for excellence in our core areas of law, including employment and HR. We are more than just a law firm; we are your trusted legal advisor and will be there at every step of your commercial journey. You are never alone. The advice, support, and representation we provide to your business will be tailored to your needs and specific to your industry sector. You can be assured that with our team handling your settlement agreement matters, exceptional outcomes are the norm.

Please contact us on 0808 164 1349 or complete our online enquiry form to find out how we can help you with all your settlement agreement matters.

What is a settlement agreement?

A settlement agreement is a legally binding contract between you and your employee, which brings an employment relationship to an end. In exchange for a settlement, which can comprise financial and non-financial benefits, your employee becomes contractually bound to not bring a claim against you in the Employment Tribunal.

In some cases, settlement agreements are also used when an employee has been offered an enhanced redundancy package. This is a package that goes beyond the redundancy package they would usually be entitled to.

What steps must be taken to ensure that a settlement agreement is legally binding?

For a legally binding settlement agreement, your employee must receive independent legal advice. Their solicitor must have made them aware of any Employment Tribunal claims they may have, the value of these claims and have informed them about the legal issues at stake. The employee can only waive their rights to bring an employment claim if they have had their own solicitor sign off the settlement agreement. Additionally, a binding settlement agreement requires that:

  • The settlement agreement is in writing.
  • The employee has signed the agreement.
  • The agreement relates to at least one specific complaint or proceeding.
  • The employee’s legal advisor is identified and insured.
  • It states in the agreement that the requirements regulating the settlement are satisfied.

What are the benefits of reaching a settlement agreement?

Reaching a settlement agreement offers you the certainty the dispute between you and your employee has been resolved and that they will not seek further future compensation. This allows you to move on from the dispute and focus on running and growing your business, free from any distractions.

My employee has asked for a settlement agreement. What should I do?

In some situations, an employee might suggest using a settlement agreement for a clean break. This often occurs when the relationship of trust and confidence has broken down. An example of this would be where their grievance has not been upheld, or you have recently disciplined an employee, and they are not happy with the penalty. You do not have to enter into a settlement agreement, but you must consider whether it would benefit you and your business. Our solicitors can advise you on the pros and cons of entering into a settlement agreement, so you can make an informed decision.

Is a settlement agreement confidential?

Settlement agreements almost always come with a confidentiality clause that includes preventing the employee from disclosing why the agreement was necessary in the first place and the details of the compensation awarded.

It is important to be aware that you should not use a confidentiality clause (also known as a non-disclosure agreement (NDA) to prevent or deter an employee from:

Our solicitors will ensure that your settlement agreement confidentiality clauses stand up in court, and they in no way risk your commercial reputation.

Contact our Settlement Agreement Solicitors

As a full-service law firm, we will work as an extension of your in-house legal and HR teams, offering support, and guidance and providing all the settlement agreement law expertise you will ever need. We will limit your risk exposure and ensure you can make any employment-related changes needed to meet your commercial ambitions whilst remaining fully compliant with employment law regulations.

We pride ourselves on our reputation for delivering reliable, commercially-focused advice to help you reach a settlement with your employee in the most cost-effective manner. Throughout negotiations, you will be given strategic and robust representation to help protect your position and that of your business. Speak to one of our employment solicitors today to find out how we can help.

Our employment law teams are based in Sheffield and advise and represent clients throughout England and Wales. Contact us today on 0808 168 5813 to find out how we can help.

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  • Tel: 0808 164 4106
  • Fax: 0844 225 0572

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2022 Wilford Smith is the trading name of WS Strategic Ltd. a limited company registered in England and Wales, registration number 07777022. Registered office – Meadowhall Business Park, Sheffield S9 2EQ. We are authorised and regulated by the Solicitors Regulation Authority. SRA Registration Number 640898.