Settlement agreements

A settlement agreement allows employers and employees to end their relationship in the event of a dispute.  At Talbots Law, we understand the intricacies of settlement agreements and how to negotiate them in a way that ensures your commercial interests are protected.

A settlement agreement can be proposed by either a staff member or an employer, but proposal by the latter is more common.  The document provides a vehicle to set out the terms and conditions agreed by parties when they decide to settle a potential employment tribunal claim, or other court proceedings.

Our employment solicitors have years of experience negotiating and drafting settlement agreements.  We understand that if a settlement agreement is being proposed, both parties may have a level of animosity and distrust between them.  We can handle this.  Our skilled negotiators will work with you to base the terms of the settlement agreement on facts and reason, and assist in keeping emotion at bay.

We work professionally, competently and quickly, which is why we are one of the busiest, most respected law firms in the West Midlands.

Why choose Talbots Law to manage your settlement agreement?

We act fairly.  One of the main reasons settlement agreements are offered is employers can stipulate that if the employee agrees to the terms, no further action against them can be taken in the employment tribunal.  Usually a settlement payment is offered in exchange for this.

Because fairness is one of our values, you can be confident that the deal we negotiate for you will be in the employee’s interest as well as your own.  This will negate the possibility of further legal action being taken by your former employee.

Our solicitors take immense pride in assisting clients who are experiencing what can be stressful times.  Dismissing an employee is never easy, but with our advice and negotiation skills, you can relax knowing that the process is being managed correctly and fairly.

Key points of a settlement agreement

  • They are legally binding
  • They can waive an employee’s right to bring a further claim in the employment tribunal
  • The employee will usually receive a payment and a positive reference
  • They are voluntary
  • Negotiations about settlement agreements are often confidential and will not be admissible as evidence in claims before an employment tribunal or in other court proceedings if no settlement is reached

Settlement agreement FAQ

Can I force an employee to sign a settlement agreement?
No, the agreement must me entered into without coercion being present.

Do I have to pay income tax on a settlement payment?
The employee does not have to pay tax on the first £30,000.  Any amount after this will be subject to normal rates of tax and NI deductions.

If you wish to propose a settlement agreement for one of your staff, please contact our employment specialists today.  We would be happy to explain the process to you and assist you in your strategy and negotiations.

For more information on settlement agreements, speak to the specialist solicitors at Talbots Law today. Just give us a call on 0800 118 1500 to get started.

  • Reyhana Koser
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