Settlement Agreement

What is a Settlement Agreement?


settlement agreement (previously known as a compromise agreement) is a legally binding contract between an employer (usually a company) and an individual (usually a former employee).  

A Settlement Agreement does two main things: 

  • Firstly, it settles a dispute. In the majority of cases this will also involve the employee’s employment being terminated. 
  • Secondly, it will act as an effective waiver of all employment and termination related rights the individual has against their former employer. 

For a settlement agreement to be legally binding it must be in writing, it must be signed by both parties and the employee must receive independent advice (with the adviser named within the settlement agreement) as to the terms and effects of the settlement agreement. In practice the adviser will usually be a qualified lawyer but sometimes it may be a trade union official, law centre adviser or a legal executive. 

If you require advice on a settlement agreement, please read our Settlement Agreement section on our website for more information and to how we can assist you. 

Or please get in touch with us on our contact form or call us on 01483 303636 to discuss your situation and see how we can help.

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