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Wherever possible, it is better to part on agreed terms.

If you wish to end a relationship with an employee in an amicable and mutually agreed way, a settlement agreement, formerly known as a compromise agreement, is an effective tool for this purpose. These agreements typically provide that a sum of money will be paid to the employee in exchange for the employee waiving their rights to make a claim against the employer. 

At Partners Employment Lawyers, we specialise in negotiating and drafting settlement agreements for business clients. We have advised on over 1,000 settlement agreements over the years, both in individual cases and large-scale (collective) redundancies. If you are considering offering a settlement agreement to an employee, it is important that you work closely with specialists in this area to ensure the document is legally binding. To discuss your settlement agreement needs with our Employment Lawyers, contact us today.

In which situations is a settlement agreement appropriate?

Settlement agreements are most appropriate when a business wishes to bring an employer-employee relationship to an end in an amicable way. They can be used to resolve an ongoing dispute or to prevent a potential dispute from occurring.

When is a settlement agreement legally binding?

There are several requirements for a settlement agreement to be enforceable including that:

  • It must be in writing
  • It must relate to a particular complaint or proceedings
  • The employee must receive independent legal advice on the rights they are abandoning (the employer normally pays a contribution to the employee’s legal fees)
  • It must be signed by the employee, the employer and the legal adviser.

Which statutory rights can be waived through a settlement agreement?

In most cases, the employee will agree to sign away their rights to make statutory claims such as unfair dismissal, breaches of their right to be paid sick pay, to have holidays and holiday pay and not to be discriminated against.

What are the benefits of settlement agreements?

The beauty of negotiated settlement agreements is that the parties ultimately reach a mutual acceptable end to the working relationship. If you were to go to an Employment Tribunal, a court decision is imposed on the parties, normally after considerable legal costs and stressful litigation.

Settlement agreements are not just about the amount of money to be paid, they are a form of contract and can be drafted to include special clauses tailored to the needs of the parties. They can also include clauses concerning confidentiality and non-disparagement to protect your business once an agreement is reached. They also offer a chance to consider strategic requirements such as bonus arrangements and, importantly, clauses confirming arrangements on reputation and references.

How can Partners Employment Lawyers help?

We specialise in negotiating and drafting effective and enforceable settlement agreements on behalf of businesses. Our employment law experts will work with you to ensure the agreements achieve your commercial objectives and protect your business.

With meeting facilities all around London and the South East, we can assist employers looking to negotiate a departure. Our off-site meeting venues are ideal for group redundancies guaranteeing the independence of our advice and also minimising disruption in the workplace. We can also come to your office for convenience. However, in many cases we can do this by phone.

Settlement Agreement Lawyers London

Our Employment Lawyers are based in London and work with business clients operating throughout England. For advice and legal services relating to settlement agreements, contact our approachable and professional team – call 0207 374 6546 now or contact us online.

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0207 374 6546


07809 694 400

excello law partners employment lawyers londonPartners Employment Lawyers is not a firm of solicitors. Members of Partners Employment Lawyers are consultants at Excello Law Limited and legal services are provided by Excello Law Limited which is authorised and regulated by the Solicitors Regulation Authority under SRA number 652733.
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