Have you been given a settlement agreement at work?
Settlement agreements are intended to settle disputes between an employer and an employee and swiftly and amicably end the employee’s employment contract. If you have been given a settlement agreement, it is only effective once you have received advice from a relevant independent advisor. It is important to ensure that what you are being offered is fair and we can advise you on this.
A settlement agreement must comply with minimum legal requirements. If it does not, an employee may still be able to pursue a claim against their employer.
Your employer will be expected to contribute a minimum of £300 plus VAT towards your costs. The amount the employer is prepared to pay will be set out in the settlement agreement. It is usually possible to conclude this without any further cost to you.
How does a settlement agreement work?
Previously known as a Compromise Agreement, a settlement agreement offers an employee a financial payment (salary, notice pay, compensation payment, for example) in exchange for agreeing that they will not pursue any legal claims against the employer. It is usual for an agreed reference to be inserted into the agreement.
You will normally be expected to waive your rights to all potential future claims, whether you are aware of them or not. There are, however, some exceptions to this, particularly in relation to accrued pension rights and personal injury claims.
Compensation amounts of up to £30,000 are tax-free (amounts payable above that and those under your terms of employment, such as notice or bonus payments, are normally taxed in the normal way, but there are exceptions). Payment of your settlement sum will usually occur 2-4 weeks after the agreement has been signed or your employment termination date (whichever is later).
A settlement agreement typically includes:
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Termination of employment
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Termination payment
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Employee warranties
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Settlement of claims
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Tax indemnity
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Confidentiality obligations
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Agreed reference
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Post termination restrictions
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Payment of legal costs
The Settlement Agreement Process
- When you have a draft settlement agreement you should contact us to make an appointment.
- We will arrange an in-person or online meeting and will ask you to send us a copy of your draft settlement agreement in advance.
- During the meeting the solicitor will ask about your employment history and advise you of any potential claims you have.
- They will run through the settlement agreement to explain any confusing clauses and advise you of any that should be altered or removed.
- They will advise you whether the amount being paid by your employer is reasonable and you can decide whether you wish to accept the financial package offered.
- If you decide not to accept the package offered, we will advise you of your options. These include instructing us to negotiate a higher sum on your behalf.
- Once you are happy with the financial package and the wording of the agreement, you will sign it.
- The solicitor will then sign an Adviser’s Certificate confirming you were advised of the terms and effect of the agreement.
- We will then send the adviser’s certificate and the executed agreement to your employer for them to sign.
- Your employer will sign and return the agreement and the matter is then closed.
How ELS Solicitors can help
Our team of dedicated employment law solicitors can help and advise you on your rights and whether your settlement agreement is fair. We can help you with negotiations, if necessary, execute the agreement, and provide you with the adviser’s certificate.
Your employer will be expected to contribute a minimum of £300 plus VAT towards your costs and it is usually possible to conclude this without any further cost to you. This would normally cover your initial consultation and providing the adviser’s certificate. We will advise you if your circumstances are likely to make this process more costly.
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I cannot say what a huge support.Vital, Ashmina and the team were in helping me navigate an incredibly challenging employment matter. The advice and support they provided was invaluable, based on years of experience and expertise. More than that, I felt hugely supported and reassured at each step. This was a journey that I did not traverse alone and I am grateful for a positive outcome that enabled me and my family to move on.
Dr T
November 25, 2021Exceptional Legal Support – A Solicitor Worth Trusting I recently had the pleasure of working with Vital Ruwala from ELS Solicitors Ltd and I am compelled to share my positive experience. From the initial consultation to the resolution of my legal matter, Vital Ruwala demonstrated unparalleled professionalism, expertise, and a genuine commitment to my case. One of the standout qualities of Vital Ruwala was their ability to clearly communicate complex legal concepts in a way that was easy for me to understand. They patiently took the time to answer all of my questions, alleviating any concerns I had throughout the process. This level of transparency and accessibility made me feel confident and well-informed at every stage. Moreover, Vital Ruwala exhibited an impressive depth of knowledge in their field. It was evident that they had a comprehensive understanding of the legal intricacies related to my case. This expertise was instrumental in achieving a favorable outcome, and I am grateful for the meticulous attention to detail that Vital Ruwala consistently demonstrated. In addition to their legal acumen, Vital Ruwala displayed exceptional professionalism and dedication. They were consistently responsive, keeping me informed about the progress of my case and promptly addressing any new developments. This proactive communication style helped build trust and ensured that I felt supported throughout the legal process. The commitment to excellence exhibited by Vital Ruwala extended beyond their legal expertise. Their empathy and understanding of the emotional aspects of my situation were truly commendable. It was evident that Vital Ruwala genuinely cared about my well-being and sought to minimize the stress associated with legal proceedings. In conclusion, I highly recommend Vital Ruwala to anyone in need of legal representation. Their combination of legal proficiency, excellent communication skills, and compassionate approach sets them apart as a solicitor who goes above and beyond for their clients. I am immensely grateful for the positive experience I had working with Vital Ruwala and would not hesitate to seek their assistance in the future.
Henry Polania
February 6, 2024Vital is very experienced and his professional expertise helped me win my case with more than what I had hoped for.
Power House
May 27, 2022Vital was very professional and knowledgeable in the legal aspects of my settlement agreement. He helped with negotiations and achieved a good outcome which I probably wouldn’t have achieved with a different solicitor. Would highly recommend his services in employment legal matters.
T Claire
March 20, 2023 -
I used these solicitors to get further advice regarding a grievance I had with my boss at work with the possibility of taking my case to a tribunal. Vital was very professional and explained to me in simple terms what my options were. He able to negotiate a very good exit package/agreement which I would not have been able to get without his help . I would highly recommend ELS solicitors for anyone who finds themselves in a similar position and requires expert employment law advice and support .
Jo Bloggs
December 9, 2022Vital acted on my behalf during my voluntary redundancy. He worked professional and acted upon my wishes. Recommended
Spencer Rose
December 21, 2022ELS Solicitors assisted with the review of my settlement agreement. They were very engaged and turned around the review and finalization of the documentation extremely quickly.
Mike Freeman
December 8, 2021Vital at ELS Employment Solicitors was incredibly helpful with my case. He explained everything very clearly and he was super helpful. I really appreciate all his work!
Georgia P-B
May 24, 2024 -
I went to Vital Ruwala at ELS Employment Solicitors last year with my difficult case which recently concluded with a positive outcome and he has been nothing short of amazing. There have been many times when I wanted to give up and walk away due to the stress it had caused me but Vital helped me through it with his support and professional advice. His knowledge and expertise in dealing with cases like this brought me ease. He was always informative and keeping me up to date. I genuinely cannot recommend Vital enough as in my opinion, he is one of the best Employment Lawyers out there. Thank you for everything Vital.
R Rahman
April 20, 2023I’ve had the pleasure of working with Vital twice now over the last few years, and has always given astute, knowledgeable advice in a hassle free manner, ensuring things are done efficiently. Hope I don’t have to use his services again, but if I do, I’ll be heading back to ELS Employment Solicitors.
Thomas Bensted
March 12, 2024Vital recognised that I was unfairly dismessed and correctly informed me that I have a high probability of a successful appeal. The appeal went ahead as planned, seamlessly and effectively with a great outcome. Thank you.
Ulus Isa
January 20, 2023There aren’t many words that can express how EXCELLENT Vital and his team worked for my case. It was complex and emotional for me. Vital was always there to answer any questions, advice and consolidate. Whilst being so professional and empathetic during this difficult journey. I felt genuinely that Vital was on my team and I implicitly trusted him throughout the process. This all worked out in my favour and I cannot recommend him more. Context- recruitment consultant.
R M
September 19, 2022