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Guidance on Settlement Agreements 

A settlement agreement is a special kind of contract between an employee and an employer. It’s an exception to the general rule that a person cannot give up his or her rights to make a claim in an employment tribunal or a court. 
An agreement is a sensible way of resolving a dispute but any attempt to do this without following the rules on settlement agreements won’t work and the arrangement will be unenforceable. A good reason why you should seek legal advice early. 
 
Settlement agreements are normally used: 
 
to end a disagreement between an employer and an employee at the end of employment or 
to reach a negotiated compromise about how and on what basis an employee will leave. 
 
Settlement agreements are becoming increasingly common in cases of redundancy. They are also used in many kinds of cases where employment law issues arise such as unfair dismissal or discrimination claims. 
 
The purpose of a settlement agreement is to record the terms of employment will end or a dispute will be resolved. Those terms are usually that the employer will pay a sum of money in return for the employee giving up rights to make the employment-related claims set out in the agreement.  
 
In summary, the rules on settlement agreements are: 
 
The settlement agreement must be in writing 
The settlement agreement must contain certain information stipulated by law 
An employee must receive advice on the meaning and effect of the settlement agreement by someone qualified to do so such as Spencer Shaw Solicitors 
The advice must include the effect of the settlement agreement on an employee’s ability to make a claim to an employment tribunal. 
 
An employer almost always makes a contribution to the legal costs of advice on the meaning and effect of the agreement. 
 
With most settlement agreements, the employer’s contribution to costs is often enough to cover the cost of the work we do for an employee. As an employee, there may not be a charge to you for our work. 

 We frequently deal with Settlement Agreements... 

For Employers 

If you are an employer, we prepare settlement agreements and advise on how best to protect your interests. This includes advice on the amount of the settlement if a payment is to be made, and how to ensure that the agreement achieves everything you want it to. 

For Employees 

If you are an employee, we help you understand the meaning and effect of the settlement agreement and its implications for your legal rights. 
 
Your employer will almost always offer a contribution towards your legal costs for advice on the meaning and effect of the settlement agreement. This does not mean that the adviser has any connection to nor owes any obligation to the employer. If we are instructed by you, we are your solicitor when giving advice, not your employer’s. It doesn’t matter who pays for the advice. 
 
 

Professional and efficient service 

"Seeking advice and support on concluding a settlement agreement with my employer, Ian immediately responded to my online enquiry and seamlessly guided me through the agreement process to a successful conclusion. 
I would have no hesitation in recommending Spencer Shaw Solicitors." 
Darrin1967 
 
If you would like any more information about the services we provide, please contact us. 
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