If you find yourself in a position where you are being made redundant, and have been sent a settlement agreement, you’ll no doubt feel concerned and worried about what to do next. To help you take the first steps, read our answers to the top 5 frequently asked questions about settlement agreements.

1. What is a settlement agreement?

A settlement agreement is a legally binding agreement between you and your employer which details what will happen as a result of the termination of your employment. This may be as a result of redundancy, a mutually agreed reason or a dispute between you and your employer. A settlement agreement should be in the best interests of both the employer and the employee.

2. What is included in a settlement agreement?

Settlement Agreements often contain confidentiality clauses, so it is important that, if you have been sent an agreement, you do not discuss its existence or content with anybody before seeking legal advice. Under the terms of most settlement agreements, you will typically receive a payment. This may be referred to as a ‘termination payment’, ‘settlement payment’ or even ‘compensation’. In exchange for this, you agree to waive your rights to bring claims against your former employer. It is therefore essential to ensure that all issues are resolved before the agreement is signed. The agreement may also include non-financial matters, such as any other benefits and arrangements for returning company property.

3. Can the agreement be negotiated?

The amount of compensation you receive will depend on the circumstances. Where you are offered a settlement payment in a redundancy situation, your contractual entitlements such as notice pay and accrued annual leave should be included, as well as any statuary redundancy payment you are entitled to. The termination payment can also include some compensation for the loss of your job.

You can attempt to negotiate a better deal if you feel the offer is unacceptable to you. However, you should be sure there is an incentive for the employer to increase the offer. You will be in a stronger position to negotiate if you have possible legal claims.

4. Do I need to see a solicitor?

One of the requirements of a settlement agreement is that the employee must receive independent legal advice from a legal professional for it to be legally binding. It’s also important to work with an employment solicitor to ensure you have a full understanding of what you are signing. Once it is signed you are waiving your rights to bring an employment claim later. Here at HRJ Foreman Laws Solicitors, we will carefully explain the details of the agreement to you and highlight any issues for your consideration.

5. Do I have to pay for legal advice about my settlement agreement?

Most employers will contribute toward your legal costs. However, this sum is often limited and is usually just enough to cover a review of the agreement and advice on the terms of the arrangement. If you are happy with the terms if the agreement, generally you will not have to pay for the advice. If you are rejecting the agreement and wish to proceed to an employment tribunal, costs will be provided to you based on your case.

For legal advice about a settlement agreement email info@hrjforemanlaws.co.uk or call Hitchin 01462 458711, Welwyn Garden City 01707 887701,

Keep up to date with our legal news and follow us:

• Facebook
• Linkedin
• Twitter
• Instagram