A settlement agreement (previously compromise agreement) is a legally binding contract between an employee and an employer which takes away the employee’s rights to make a claim in a court or tribunal. In exchange, the employer promises various payments, usually beyond what the employee is legally entitled to. Settlement agreements can be used to end an employment relationship; settle disputes whilst still employed or to settle claims already issued at the Employment Tribunal.
In order for a settlement agreement to be binding the terms of the agreement must be in writing, it must relate to a particular complaint/dispute and you must receive advice from a suitably qualified lawyer or authorised member of a trade union (who is identified in the settlement agreement), who needs to confirm that a contract of insurance in relation to the advice exists.
Strictly speaking, most solicitors can advise on settlement agreements but only a solicitor with experience in employment law can give expert advice on the full effect and meaning of the typical terms found in settlement agreements.