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Settlement agreements

A settlement agreement is a legally binding contract that typically seeks to end an employer-employee relationship with the waiver of statutory and contractual employment law claims. It is often used when an employee is dismissed or made redundant, but they can be used while an employee is still employed, depending on the circumstances.

Employment law rights are complicated and can only be legally waived in two ways. While an employee can waive their employment rights via ACAS and their ‘COT3’ settlement terms, a settlement agreement is the far more commonly used option.

For the settlement agreement to be effective, the employee waiving their rights must be independently legally advised on the legal rights that they are waiving and on the terms and effect of the settlement agreement they are entering into. If not, the agreement is not legally binding.

Our employment solicitors advise both employers and employees on the negotiation, drafting and effect of settlement agreements.

How our employment solicitors can support employers with settlement agreements

Collective settlement agreements

There will be occasions when an employer makes a large number of redundancies in one go. This might mean several hundred or even thousands of staff leaving at the same time. In this situation, settlement agreements are often used if the redundancy payment is being enhanced by the employer or if there is some other incentive for the staff to waive their legal rights.

In these cases, employers will often refer large numbers of staff to us to be advised on their individual settlement terms. We are very experienced in working with these large groups of employees to streamline the process of advice so that all the settlement agreements can be completed in a short space of time, often completing several hundred settlements in a week. Our systems are set-up to accommodate the need for a quick turnaround while ensuring that the redundant employee is properly advised.

Contact an employment solicitor

If you would like to learn more about how we can support your business, please contact a member of our Employment & HR team below or call 0800 652 8025.

Clarke Willmott has offices in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton. We provide employment law and HR advice to businesses in the UK and internationally.

Your key contacts

Marc Long

Head of Employment and HR Team/COFA

Southampton and London
Marc Long is the Head of Clarke Willmott’s Employment and HR team specialising in TUPE and outsourcing.
View profile for Marc Long >

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