Settlement Agreements

What are Settlement Agreements?

Settlement Agreements (formerly Compromise Agreements) are legally binding contracts between you and an employee used to terminate employment. They protect an employer against future claims on any matters outlined in the Settlement Agreement.

While Settlement Agreements are common with termination of employment, they are voluntary and often involve negotiation between employer and employee. Therefore, in order to protect your business and achieve the best outcome you will need to consider a variety of issues to be covered within the Settlement Agreement. 

It may be that there are specific issues around protecting your intellectual property, confidential information and trade connections that should be dealt with in the Settlement Agreement. You may wish to use the Settlement Agreement as an opportunity to re-negotiate any post-termination restrictions or agree garden leave.

How do we provide Settlement Agreement Advice?


Our employment lawyers regularly handle the negotiation, drafting and completion of Settlement Agreements.

The negotiation process can be either directly with your employee, his/her legal representative or through ACAS. Owing to our experience in this area, we can often negotiate an outcome that surpasses your expectations, saving you both time and money.

Our expert Settlement Agreement Lawyers also understand that there are often practical issues to consider, such as, the handover of duties, timing of payments and the requirement for employees to return property belonging to your organisation.

Important considerations for an effective Settlement Agreement


A key aspect relating to Settlement Agreements is how and when to start discussions and, where possible, for these to be confidential and “without prejudice”. Employers may unwittingly leave themselves open to future claims if this process is not handled correctly.

For a Settlement Agreement to be enforceable, the employee will require independent legal advice with respect to its terms and effect. It is here where issues can often arise and negotiations can breakdown. Fortunately, we are able to ensure any breakdown is minimised and, in our experience, negotiations we are involved in very rarely (if ever) fail.

Early and decisive action in these matters is often highly advantageous. Please contact our expert team of lawyers today if you think you need advice regarding a Settlement Agreement.

Our Team


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