About us
We are a specialist boutique employment law firm located in the Thames Valley, just a small jump from London.
Experts in resolving
Settlement Agreements
We have advised countless employees and employers in many different sectors on their Settlement Agreement terms, including issues like the appropriate level of compensation, taxation of payments, bonuses and share options on termination, references and announcements, and more.
We are well known for our expertise as well as our friendly and approachable style.
Specialists in Settlement Agreements
Highly experienced employment lawyers
Covering all of England and Wales
Advising individuals and businesses
Julian Taylor
Settlement Agreement Solicitor
We understand that leaving employment can be a stressful time and that you need to secure the most favourable terms you can to protect yourself financially and reputationally.
People are at the heart of what we do. We are a team of highly experienced employment lawyers. With us, you can be confident you will have an expert adviser to guide you through your Settlement Agreement so that you understand it fully.
We will guide you through the process and provide prompt, approachable and tailored advice.
Where the agreement isn’t right for you we can advise you on how best to negotiate a better deal and often negotiate better terms on behalf of our clients.
Julian Taylor
Employment solicitor
There is generally a tax exemption that allows up to £30,000 of an ex-gratia termination payment to be paid without deductions for tax and national insurance. It isn’t always this straight forward and the position will depend upon your circumstances and the payments being made.
We've outlined more information on the link below.
Because an employer is getting the benefit of a binding waiver of your employment claims when you sign up to a settlement it is customary for the employer to pay some, if not all, of your legal costs in taking advice.
We’ve detailed some more information on typical legal costs associated with Settlement Agreements.
Have you been offered a Settlement Agreement by your employer?
A Settlement Agreement (formerly known as a compromise agreement) is a legally binding contract made between an employer and an employee or former employee.
It will generally set out terms for a parting of ways between the parties, and once signed, prohibits the employee from bringing legal action against the employer in relation to their employment or its termination – in other words it is usually a full and final settlement that cannot be undone.
This waiver of claims is usually in exchange for a termination payment made to the employee, and sometimes other benefits such as the provision of a reference or the ability to retain certain equipment.
This kind of contract is only binding if you receive independent legal advice on the content, usually from a qualified solicitor who signs off a certificate attached to the agreement to confirm they have given you the required advice. READ MORE - what is a Settlement Agreement?
Our employment & HR solicitors
We are an established Employment law firm advising clients in London, the Thames Valley and throughout England and Wales.
We specialise in Settlement Agreements and are drafting and advising upon them daily.
Because we act for both employers and employees we have seen both sides and are tactically aware of how best to advise you.
Prompt & efficient
Covering England & Wales
We can serve remotely
Common questions about Settlement Agreements
Here are a few of the common questions we're asked about Settlement Agreements. If you have a different question that you can't find the answer to below, please don't hesitate to send us a message and we'll see how we can help.
A Settlement Agreement is a binding contract between an employee and their employer (or former employer) under which the employee agrees to waive their rights to pursue claims against their employer, usually in return for some kind of enhanced compensation payment... READ MORE
In most cases, the benefit of a Settlement Agreement for you is the payment of an enhanced sum of money to help you to move on from your role – a financial cushion from which you can look for a new job... READ MORE
Settlement Agreements are offered in a variety of situations, from redundancy situations to performance or conduct issues, due to a grievance that has been raised, or due to legal proceedings against an employer... READ MORE
A Settlement Agreement is a contract between an employer and an employee (or former employee) designed to settle workplace claims. An NDA (non-disclosure agreement) is the name given to an agreement, usually in a commercial context, where the parties agree terms to safeguard their commercially sensitive confidential information... READ MORE
You will often see this heading written on the top of Settlement Agreements or correspondence relating to negotiations or an offer of a settlement... READ MORE
A “protected conversation” (under section 111A of the Employment Rights Act 1996) is a way for your employer to have an “off the record” conversation with you to explore options for you to leave the business, even if there isn’t technically any dispute between you... READ MORE
An ex-gratia payment is a payment made to an employee (or former employee) by an employer where there is no legal obligation for such a payment to be made. It is the name given to describe a payment that is over and above the sums you are entitled to receive... READ MORE
As well as compensation in return for a waiver of claims it is likely that the agreement will include terms dealing with you handing back your employer’s property, the reference you can expect to receive, non-disclosure and confidentiality obligations, and any post-termination restrictions that could impact on what jobs or activities you can do in future... READ MORE
The level of payment that you can reasonably expect will depend on a range of factors, including age, length of service, salary, benefits, notice period and others.... READ MORE
What is an average Settlement Agreement payout?
Each case depends on its own facts. Comparing, or trying to look at averages isn’t very helpful in these circumstances because in each case it will depend on the context and particular leverage of the parties. There is no one size fits all. Our experience in handling hundreds of Settlement Agreements means we are well placed to advise you on your specific deal.
Who drafts a Settlement Agreement?
How long should I be given to consider the offer of a settlement?
You do not have to accept a settlement agreement, and you should never feel forced into accepting terms.
For a Settlement Agreement to be binding it is a legal requirement that you take legal advice on its terms (and your adviser will need to sign a certificate, usually annexed to the agreement, to confirm that you have received that advice). We are experts in this field and frequently advise employees on the terms of settlements so that they can be sure they understand the terms and are getting the best deal for them.
You need to be given enough time to obtain that legal advice. There is ACAS guidance that, as a general rule, ten calendar days should be allowed to consider the proposed formal written terms of a Settlement Agreement and to receive independent advice, unless the parties agree otherwise. This is not a concrete rule, and in certain cases a shorter time frame may well be given, but 10 days is a good rule of thumb. As advisers we are used to turning these things around quickly to ensure any deadlines are met.
Will my employer cover my costs?
Because an employer obtains the significant benefit of a waiver of claims, and because the employee has to take legal advice on the deal, it is customary for the employer to cover, or at least make a contribution towards, the employee’s legal fees.
How does a settlement payment compare with a tribunal award?
There are a number of factors in play here:
- Your notice period and whether you are expected to work your notice period;
- There is a minimum statutory redundancy payment calculated with reference to your length of service and age – the government’s calculator can be found here - Government Calculator;
- Whether your employer has a more generous approach to redundancy payments – some employers enhance the statutory calculation;
- Whether your selection for redundancy or the process adopted was unfair – in these circumstances you will have a claim for your losses flowing from that unfair dismissal including lost income.
How do I ensure my Settlement Agreement is legally binding?
A waiver of statutory employment rights claims in a Settlement Agreement will only be valid if the employee has received independent legal advice on the effect of the agreement, and in particular on their ability to bring the claim(s) in question.
Will you be taxed on the ex-gratia payments in your Settlement Agreement?
If you have been made redundant, will redundancy payments be payable tax free?
What about pension contributions?
Will your pay in lieu of notice be taxable?
Yes.
Will your salary, bonus and benefits be subject to tax as normal?
What is Post Employment Notice Pay (“PENP”)?
If you have accrued but untaken holiday, will the pay in lieu be taxable?
Are contributions to outplacement services taxable?
Should the consideration payment for restrictive covenants be subject to deductions?
Taxation of share options and share awards
Can payments for personal injury and injury to feelings following discrimination be paid tax free?
What if the termination payments are staggered across the end of a tax year?
What legal fees are involved with a Settlement Agreement?
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Do you need a Settlement Agreement reviewed and signed by a qualified solicitor?
Contact us today for help with your Settlement Agreement.