Capper & Jones Solicitors

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Tel: 01352 752020

Fax: 01352 756967

Email: mail@capperandjones.co.uk

Authorised and Regulated by Solicitors Regulation Authority

SRA Number: 00047132    

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Old Bank Chambers

1 King Street

Mold

Flintshire

CH7 1LA

What is a settlement agreement?

A settlement agreement is often referred to as a ‘severance’ or ‘redundancy agreement’ and previously a ‘compromise agreement’. In short, a settlement agreement is a legally binding contract that prohibits employees from suing their employer, usually after they have received a sum of money in return for agreeing not to bring certain claims against their employer.  Once a settlement agreement has been signed an employee will no longer be able to make an employment tribunal claim or any other type of claim that has been listed in this agreement.

For a settlement to be legally binding, an employee must receive independent legal advice.

Requirements of a legally binding settlement agreement:

• A settlement agreement must be in writing
• It must relate to a particular proceeding(s) or complaint(s)
• It must be signed by the employee
• The employee must have received independent legal advice
• The legal adviser must be identified and insured
• The agreement must state that the requirements regulating the settlement agreement have been satisfied

Legal advice

The employee must seek specialist independent legal advice before signing the settlement agreement. The employment solicitor should advise the employee on any potential claims so that the employee fully understands the legal issues and the value of any potential claims.  As employees have rights under UK law, anyone signing a settlement agreement should seek legal help before signing as a solicitor will make sure your rights are protected and that you are aware and fully appreciate these rights before you sign them away.

Received a Settlement Agreement and need advice?  Give us a call!

Will I need to pay for this?

The cost of advice under a settlement agreement will in the majority of cases be covered by your employer, meaning that you may not have to pay anything for this advice personally. Costs are fixed and usually average between £300 to £500 plus VAT** Settlement Agreements are usually completed within 2 to 3 weeks.

What are the benefits of settlement agreements?

The advantage to the employer of getting a settlement agreement is that the employer can be sure the employee will accept the settlement and not seek further compensation. The advantage of a settlement agreement to the employee is that they receive a guaranteed amount of compensation in return for settling their claims.

Our settlement agreement solicitors can assist by:

• Advising you on whether any claims arise on the termination of employment
• If so, advise you what those claims might be worth
• In the light of that information, advise you whether the sum offered is reasonable in the circumstances
• Explain the meaning and effect of the agreement to you and advise you whether anything needs to be amended or changed
• Negotiate on your behalf as required

Why do I need a solicitor?

Settlement agreements can be written in very formal language and can refer to sections of Acts and Regulations which you may never have heard of.  Therefore, it is important that you understand the effect of the settlement agreement. It is a legal requirement that you get professional advice on what the agreement means. It is also a legal requirement that your adviser signs the settlement agreement to confirm that advice has been given.

According to the Employment Rights (Dispute Resolution) Act 1998, that advice can only be given by a qualified lawyer, a qualified trade union official or a qualified centre worker, all of whom must be covered by an appropriate certificate of indemnity insurance.