It is now increasingly common for employers to seek to end an employee’s contract by using Settlement Agreements.

What are Settlement Agreements?

Settlement Agreements provide for a payment to be made to the employee who, in turn agrees that he or she will accept that sum in full and final settlement and cannot bring any claim against the employer arising from the employment (unfair dismissal, discrimination, redundancy, constructive dismissal etc).

Specialist legal advice is required to explain the nature and effect of the agreement.

These documents are vitally important as they will, when executed, bring to an end the relationship between an employer and an employee.

employment agreement

They usually provide for a lump sum payment to the employee (“termination payment”) in addition to contractual salary, holiday pay or other benefits.

Many employers will try to pressure an employee into signing by suggesting the document must be signed by a particular date or the terms will be less favourable etc.

Specialist legal advice is essential

Once the agreement has been signed you are precluded from bringing any claim against your employer in respect of your employment with them.

You are accepting the payment as a final settlement and as compensation for loss of your employment. It is therefore vitally important that you receive specialist advice and understand all the terms of the agreement.

You are not obliged to sign a Settlement Agreement.

Without prejudice

The agreement will usually be expressed to be “without prejudice” until executed. This means that if you do not proceed with the Settlement Agreement you cannot refer to it in any subsequent proceedings. Once it has been signed by the parties it becomes a binding agreement. Until then, it is said to be without prejudice and is privileged from production.


Settlement Agreements usually provide that legal fees incurred in connection with the agreement will be met (or contributed towards) by the employer.

We have years of experience in this area.

We usually ask for a copy of the agreement prior to the appointment so as to enable us to fully consider the documentation before advising you in person and in writing.

• We will be happy to come and see you at home
• We’ll talk to you in plain English
• You are not obliged to sign a Settlement Agreement
• Specialist legal advice is required to explain the nature and effect of the agreement

Please call us on 0161 205 2772 or complete the form below and we will be in touch shortly.

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