Settlement Agreements

Settlement Agreements are legally binding agreements that usually set out the exit terms agreed between an employer and an employee. If they meet the requirements set out in legislation then they act as a binding waiver to bring claims against an employer.



These types of agreements are used in many different situations and usually include an ex gratia tax free payment.

Settlement Agreements can help you achieve a clean break in the relationship especially in the following circumstances:

Redundancy or restrictions

Capability or performance issues


The outcome of many Employment Tribunal claims can sometimes be uncertain and potentially costly. The Settlement Agreement route can facilitate a confidential, amicable and speedy resolution.

Each Settlement Agreement varies but typically, the key terms included are;

  • Any actual or potential claims are settled or waived
  • Payments and tax implications
  • Confidentially obligations and post termination restrictions

We can draft agreements which comply with the relevant legislation and contains the key terms to protect your business. The employee does have to seek independent legal advice on the terms and effect of entering into the agreement. We can assist you in handling this, or deal directly with their independent legal adviser to ensure a smooth completion.