What is a settlement agreement?
A settlement agreement is a legally binding contract that waives your right to make a claim against your employer to the employment tribunal or court.
Is a settlement agreement the same as a compromise agreement?
The short answer is yes. A settlement agreement is the same as a compromise agreement. In the UK, settlement agreements were called compromise agreements until 29 July 2013. They are still called compromise agreements in Northern Ireland.
Why might a settlement agreement be offered?
A settlement agreement can be used to resolve an ongoing workplace dispute or to end your employment relationship.
When can a settlement agreement be offered?
A settlement agreement can be offered at any stage of the employment relationship.
What should be included in a settlement agreement?
- The settlement agreement will probably include an offer of payment
- If your employment is ending, it may include a notice period
- It may also include a reference to help you find future work
- It must relate to a particular complaint
- It must state that the statutory conditions relating to the agreement have been met
What form does a settlement agreement take?
The settlement agreement must be made in writing. When you agree with the terms within it, you sign it. Verbal agreements don’t count.
Do I have to be offered – or accept – a settlement agreement?
No, it is entirely voluntary for your employer to offer you a settlement agreement, and you are under no obligation to accept it.
You can also propose a settlement agreement to your employer, but they don’t have to accept your offer.
You and your employer have the option of negotiating until you reach agreement (or agree that agreement can’t be reached), but neither side has to enter into discussions if you don’t want to.
How much time will I get to think about my employer’s offer?
The Acas Code of Practice on settlement agreements specifies a minimum of ten calendar days unless you and your employer agree otherwise.
Who can help me?
You can invite a work colleague or a trade union representative to attend any meetings with you.
As the employee, you must take advice from an independent expert who is named on the settlement agreement and covered by the relevant insurance (such as Paul Doran Law – hint, hint!)
What if I refuse to sign a settlement agreement?
Where you and your employer are unable to reach a settlement agreement, you may have to:
- Go through performance management process
- Go through a disciplinary and grievance procedure
- Try mediation
- Make a claim against your employer (of course, we can help with that!)
Need help?
For a FREE assessment of your claim, call 0808 168 7288 or fill in the contact form on the top right of this page.
We have already helped thousands of people to win millions of pounds in compensation.
You have a choice of ways to pay, including ‘no win, no fee’.
We will also discuss the best methods of funding your case and seek to reach a solution that best suits your needs. This can involve a “no-win, no-fee” agreement if appropriate.