W DaviesLoading ...
Box Icon Employment Settlement Agreements

Employment Settlement Agreements

A Settlement Agreement is a legally binding contract made between an employer and employee, either towards the end or just after employment has terminated. They can also be used to resolve an ongoing workplace dispute, for example, a dispute over redundancy pay.


Settlement Agreements under the Employment Rights Act are useful documents for both employers and employees as they make it possible for employment disputes to come to an end peacefully. There is usually something in the agreement for everyone.


Typically, when employment comes to and end, the employee will receive a sum of money to tide them over while they find a new job (notice money, holiday pay and perhaps a tax free ex gratia payment) and a reference. Meanwhile the employer will, through the settlement agreement, ensure that it does not have to face any claims from the employee and that the employee will behave properly after the employment is at an end regarding company clients and other company property.


How can we help you?

We’ll ensure that you fully understand the rights you’re compromising and whether the compensation payment proposed will be sufficient for such a compromise. If the compensation is insufficient we’ll negotiate directly with the employer to achieve the best result for you.

We can also advise on share sales and options to purchase as well as the tax implications of the contractual and compensatory payments.

You can be sure that we’ll make you fully aware of the ongoing obligations after execution of the agreement, for example restrictions on future employment and confidentiality.

Our Employment solicitors can also assist you in high-value court claims for breach of contract and in defending allegations relating to confidentiality or breach of restrictive covenants.


What will the ESA document look like?

Agreements vary from the very simple to the fairly complex.

Essentially the agreements deal with:

  • Identity
  • What rights are being compromised (and which are not)
  • Payments to be made and tax on them
  • The return or retention of company property
  • Obligations after employment ends
  • Notices to staff
  • References


What should I find and bring with me to a consultation?

If possible, bring:

  • The settlement agreement draft itself (and an electronic copy if possible)
  • The contract of employment and or handbook (perhaps containing policies)
  • Any pension or benefit documentation

Having these documents saves time and sometimes advice (especially about obligations after employment ends) cannot be given without them.


What does Without Prejudice mean?

It means that so long as the people having the discussion are genuinely discussing compromising their legal rights, those discussions can take place in secrecy from the Judge.

This is important because if the settlement negotiations are not successful, the employer and employee will wish to rely on their rights in Tribunal. They will not wish the without prejudice discussions perhaps containing offers to compromise those rights, or admissions which might damage them in Tribunal to be read out before the Tribunal or Court has given judgment. The system enables the employer and employee to make offers to settle. Courts can see the without prejudice discussions after they have decided the case and adverse costs consequences may follow if reasonable offers to settle have been refused.

There are procedures available for where an employer or an employee abuses protected conversations or without prejudice privilege. Privilege and protected conversations can be complex subjects and lawyers on both sides try and keep both sides safe by making sure protection is in place.

Contact us to ask about our Employment services

Select Personal or Business? *
Select Personal or Business? *

We use cookies to personalise content and ads, to provide social media features and to analyse our traffic. We also share information about your use of our site with our social media, advertising and analytics partners who may combine it with other information that you’ve provided to them or that they’ve collected from your use of their services. You consent to our cookies if you continue to use our website.

Privacy Policy | Cookie Policy

  • Overview
  • Essential [22]
  • Analytics [5]
  • Advertising [3]
  • Personalise [0]
  • Other [0]

Cookies are small text files that can be used by websites to make a user's experience more efficient. The law states that we can store cookies on your device if they are strictly essential for the operation of this site. For all other types of cookies we need your permission. This site uses different types of cookies. Some cookies are placed by third party services that appear on our pages.

You can at any time change or withdraw your consent from the Cookie Declaration on our website. Learn more about who we are, how you can contact us and how we process personal data in our Privacy Policy. Please state your consent ID and date when you contact us regarding your consent.

Essential cookies help make a website usable by enabling basic functions like page navigation and access to secure areas of the website. The website cannot function properly without these cookies.

Cookie Provider Info Duration
amplitude_id_dc1ea89f36525f97c2d3ca51c781bf54_mindbody_branded_webbwebsmart_co_ukUnknown24 Hours
mp_a36067b00a263cce0299cfd960e26ecf_mixpanelUnknown24 Hours
BIGipServerZebedeeUnknown24 Hours
_hjTLDTestUnknown24 Hours
_hjIncludedInPageviewSampleUnknown24 Hours
_hjAbsoluteSessionInProgressUnknown24 Hours
_dc_gtm_UA-74945071-1Unknown24 Hours
_gat_UA-74945071-1Unknown24 Hours
_hjFirstSeenUnknown24 Hours
_hjSessionUser_322703Unknown24 Hours
_hjSession_322703Unknown24 Hours
wp_langUnknown24 Hours
_hjIncludedInSessionSampleUnknown24 Hours
wordpress_sec_%WordPressThese cookies help us keep you logged in to our site.Session
wordpress_test_cookieWordPressSet by WordPress to check if the cookies are enabled on the browser to provide appropriate user experience to the usersSession
wordpress_logged_in_%WordPressWordPress sets this cookie to indicates when you’re logged in, and who you are, for most interface use.Session
wp-settings-%WordPressUsed to customize your view of admin interface, and possibly also the main site interface1 Year
wp-settings-time-%WordPressUsed to customize your view of admin interface, and possibly also the main site interface1 Year
bcookies_acceptanceb:cookiesUsed to store your cookie preferences for this site2 Years
bcookies_acceptance_updatedb:cookiesIndicates that the users cookie selection has been updatedSession
wp-saving-postWordPressUsed to help with the saving of content in the WP backend admin24 Hours
intercom-id-%IntercomAllows visitors to see any conversations they've had on Intercom websites.9 Months

Personalisation cookies enable a website to remember information that changes the way the website behaves or looks, like your preferred language or the region that you are in.

Cookie Provider Info Duration
We are not using cookies of this type at the moment!

These cookies gather anonymous information such as how many people are using our site or which pages are popular to help us improve customer experience. Switching off these cookies will mean we can’t gather information to improve the experience.

Cookie Provider Info Duration
_gaGoogle AnalyticsUsed to store a unique client identifier ID (randomly generated number) that is used to generate statistical data on how the visitor uses the website.2 Years
_gidGoogle AnalyticsUsed to store a unique client identifier ID (randomly generated number) that is used to generate statistical data on how the visitor uses the website.24 Hours
tk_tcJetpack/WooCommerceStore the user's usage history.Session
_gat_gtag_%Google AnalyticsUsed to set and get tracking data24 Hours
_hjidHotjarSet when the customer first lands on a page with the Hotjar script.24 Hours

Advertising cookies are used to track visitors across websites. The intention is to display ads that are relevant and engaging for the individual user and thereby more valuable for publishers and third party advertisers.

Cookie Provider Info Duration
__adal_caAdalyserUniquely identifies a user and persists long-lasting information about their behaviour on the site.2 Years
__adal_idAdalyserUniquely identifies a user and persists long-lasting information about their behaviour on the site.2 Years
_fbpFacebook24 Hours

Unclassified cookies are cookies that we are in the process of classifying, together with the providers of individual cookies.

Cookie Provider Info Duration
We are not using cookies of this type at the moment!