What is a settlement agreement?

October 14, 2021

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.

They are commonly used where an employer wants to terminate an employment relationship on mutually agreed terms, to allow the parties to achieve a clean break, but can also be used during an ongoing employment relationship to a settle a particular dispute.  

The agreement effectively draws a line under a dispute and allows the parties to move on.

Because such an agreement involves you signing away your rights, it is a legal requirement that you obtain legal advice on the agreement.

It is important that this advice comes from a solicitor with expertise in employment law.  This makes sure that the terms are fully understood and that you are getting the best deal possible in the circumstances.

We are employment law experts and frequently advise on settlement agreements. 

Where the deal isn’t right for you we can advise on how to negotiate a better deal. 

We frequently negotiate on our clients’ behalf and will often secure better terms.

Send us a message if you'd like to discuss your settlement agreement with us.


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This website contains a summary of various aspects of employment law. It is not intended to provide legal advice for specific cases. No liability is accepted for reliance on any of the information on this website. If advice is required please contact the firm. Settlement Agreements UK is the trading name of Julian Taylor Solicitors Limited, a company registered in England and Wales with registration number 7171586. Julian Taylor Solicitors Limited is recognised and regulated by the Solicitors Regulation Authority and all of its directors and members are solicitors of England and Wales.

Julian Taylor Solicitors Limited is recognised and regulated by the Solicitors Regulation Authority with registered number 533592 www.sra.org.uk