In most cases, no. If you have already signed a settlement agreement, that’s the end of the matter and you won’t be able to make a further employment law claim.
That’s just one reason why it’s so important to take professional advice before you sign anything.
A settlement agreement is a legally binding contract between you and your employer. They are almost always used when your employment contract is about to come to an end through redundancy, termination or dismissal.
They may also be used to settle an employment tribunal claim prior to the hearing or when you are resolving a dispute (such as an equal pay claim) and your employment is continuing.
Settlement agreements are sometimes called severance agreements, redundancy agreements, termination agreements or compromise agreements.
“What’s the compromise?”
By law, you have the right to bring a tribunal or court claim against your employer in the event of a dispute.
If you give up those rights, and promise not to make a claim against your employer in future, you are entitled to receive a compensation payment.
Getting the agreement in writing provides certainty for both sides.
Section 203 of the Employment Rights Act 1996 says that employees must receive independent legal advice from someone who is professionally qualified, such as a solicitor or qualified trade union adviser. This is so you can’t claim that you didn’t understand what you are signing.
“Do I have to pay tax on my settlement agreement payout?”
You will have to pay tax and national insurance on any wages and holiday pay as usual.
Usually, the first £30,000 is tax-free as compensation for redundancy or loss of employment. Payments in lieu of notice are usually taxable.
“Can I talk about it?”
Most settlement agreements contain a confidentiality clause. In some cases, you will be able to tell people who have reached an agreement with your employer but not give any details. In other cases, you are not able to breathe a word about the agreement at all.
Sometimes, there will be a clause that prevents you from saying anything bad in public about your employer or their staff, especially to the press.
You can also negotiate a clause that ensures the employer and staff can’t make any derogatory statements about you, and/or a clause that means the employer will provide a true, accurate and fair reference that you can use when applying for future jobs.
“I’ve already signed but still want to claim.”
In rare situations, you can make a claim even if you have signed a settlement agreement. It all depends on what the signed agreement says.
- If your employer breaches the agreement, for example, they don’t pay the money agreed
- If you suffered personal injury, unless the agreement excludes personal injury claims that you knew about when it was signed
- If you are entitled to pension rights you’ve accrued
Need help?
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We have already helped thousands of people to win millions of pounds in compensation.
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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.