What Is A ‘Settlement Agreement’ & Why Should I Sign One?

The Covid-19 pandemic has forced many employers to consider their business structures and staffing requirements. Sadly, these reviews sometimes lead to redundancies and you may be asked to sign something called a Settlement Agreement.

So, what is a ‘Settlement Agreement’ and why should I sign one?

A settlement agreement is a contract between you and your employer. In this, your employer will offer to pay you a sum of money in exchange for you agreeing not to sue them for certain employment claims. They are frequently used in redundancy situations or to bring employment to an end quickly as part of a negotiated exit.

Why Do I Need To See A Solicitor?

A settlement agreement needs to be signed by a Solicitor to be valid. Your employer will therefore ask you to go to see a Solicitor when they provide you with a Settlement Agreement to sign. The law protects you by requiring that you have independent advice on the terms of the Settlement Agreement and their effect. Most importantly, a solicitor will check whether you are being offered adequate compensation for the loss of your employment and will help you to make an informed decision as to whether to proceed.

Who Pays For This Service?

Your Employer! As part of the Settlement Agreement, they will offer a contribution towards your legal costs. This ought to be sufficient to cover the costs of the legal advice but if it is not, your solicitor will more than likely challenge that with your Employer.

About Timms Employment Law Solicitor Emma Spandrzyk

Emma joined Timms as an Employment Solicitor in June 2020. She has over 13 years’ experience in all aspects of Employment Law.

Emma particularly enjoys Tribunal litigation and has a proven track record in securing successful outcomes for her clients.

If you would like advice about any employment law issue, please contact Emma on 01530 564498 or via email at e.spandrzyk@timms-law.com

April 2021