Settlement agreement solicitors for employees

If you’ve been offered a settlement agreement by your employer, you may be feeling uncertain about your rights and your best course of action. 

This page outlines what a settlement agreement entails, the legal advice available to you, and how to secure the best possible terms. It highlights key considerations such as negotiation strategies, fairness of terms, potential disputes, the obligations placed on employers to follow correct procedures and the potential long-term impact of a settlement agreement on your career and financial security. It concludes with a selection of frequently asked questions (FAQs) about settlement agreements.

See also our more detailed guide for employees on settlement agreements and how much you should get in your settlement.

Expert legal advice on settlement agreements

If you’ve been offered a settlement agreement, you need to understand it and your rights before you sign it. Employers often offer settlement agreements to resolve workplace disputes, redundancy situations, or disciplinary proceedings. These agreements are legally binding and typically include compensation in exchange for waiving your rights to bring employment claims against your employer. A settlement agreement solicitor can provide expert guidance to ensure you receive a fair deal.

At Monaco Solicitors, our settlement agreement solicitors specialise in providing tailored settlement agreement advice to employees. (We don’t work for employers.) We will help you understand the terms of your agreement, highlighting potential risks and opportunities, and ensure that you are not signing away your rights unfairly. 

The emotional and financial impact of accepting a settlement offer can be significant, so having a solicitor with expertise in these matters means you can share your concerns with them and also make better informed decisions.

 

Negotiating better terms for your settlement agreement

You do not have to accept the first offer made by your employer. Negotiating a settlement agreement can lead to better financial compensation and improved terms. Some key elements that can be adjusted during negotiations include:

• A higher pay out: Employers often make an initial offer that may be lower than what you are entitled to. Your settlement agreement lawyer can ensure the offer reflects the strength of your legal claims and your needs.
• A favourable reference: A positive reference can be crucial for your future job prospects, and it can be negotiated as part of your settlement agreement.
• Extended garden leave: In some cases, you may be able to secure extended garden leave (that’s time off with pay), allowing you more time to transition into your next role without financial strain.
• The removal of restrictive covenants: Restrictive covenants that prevent you from working in a similar role or industry after leaving your employer can severely limit your career opportunities. These clauses can often be relaxed or removed entirely during negotiations.
• Contributions to legal costs beyond the statutory minimum: Employers are typically required to contribute towards the cost of independent settlement agreement advice (see below). However, they may offer more generous contributions to help ease your financial burden, especially if they want to ensure a swift resolution.

Our settlement agreement solicitors can help you negotiate more favourable terms and ensure your employer is offering a fair deal. Employers often expect some level of negotiation, and with expert legal support, you can maximise your compensation and secure terms that provide long-term benefits.

Reviewing your settlement agreement

Before signing a settlement agreement, it is a legal requirement to have it reviewed by a suitably qualified legal adviser.  A settlement agreement solicitor meets all the necessary requirements for this most important role. 

Employers are required to contribute towards your legal costs for this review, so you have access to professional guidance which you don’t have to pay for. During the review, our settlement agreement solicitors will:

• Assess whether the compensation being offered is fair: This involves reviewing the terms in relation to your employment rights, past salary, length of service, and the strength of your potential claims.
• Ensure all legal rights and entitlements are correctly accounted for: It’s not just about compensation; our settlement agreement solicitors will verify that any holiday pay, unpaid bonuses, or other benefits are fully accounted for.
• Identify any clauses that may disadvantage you in the future: Some clauses, such as restrictive covenants or confidentiality agreements, can limit your career options or cause legal issues down the line. Experienced settlement agreement solicitors – like ours at Monaco Solicitors – will carefully examine these and renegotiate them if necessary.
• Advise on any amendments that could improve your position: Our solicitors may suggest changes to the agreement that could provide more security or benefits, such as negotiating a better severance package or ensuring that your future career prospects are protected.

A thorough review by one of our settlement agreement lawyers ensures that your agreement is legally sound and that you are making an informed decision before signing.

Clarifying restrictive covenants and future employment rights

Settlement agreements often contain restrictive covenants that limit your ability to work for competitors or start a business in the same industry. These clauses can significantly impact your future career options. Our settlement agreement solicitors will:

• Explain any restrictive covenants in plain English: We will break down the legal jargon into terms that are easy to understand, ensuring that you are fully aware of any restrictions imposed on your future career.
• Negotiate amendments to overly-restrictive clauses: If a restrictive covenant is too broad or unreasonable, we will negotiate for amendments that allow you greater flexibility in pursuing future job opportunities.
• Ensure you retain your ability to work in your chosen field: We will work to ensure that any restrictive clauses are limited in scope, timeframe, and geographical reach, so they don’t unduly hinder your career.
• Protect your right to earn a livelihood: We believe that everyone should have the freedom to earn a living in a fair and reasonable way. If your settlement agreement includes clauses that could unduly limit your future income, we will fight to get them removed or revised.

Our settlement agreement solicitors will ensure that any restrictions placed on you after leaving your employer are fair, reasonable, and proportionate to your circumstances.

Ensuring your settlement agreement is fair

Not all settlement agreements offer fair compensation or terms. We will assess your case against the following factors:

• The strength of any employment claims you may have: If you have a strong case for such claims as unfair dismissal, discrimination, or other claims, you may be entitled to more compensation.
• The financial compensation on offer: Our settlement agreement solicitors will review the amount being offered to ensure it is fair based on your circumstances and the potential legal risks of pursuing a claim.
• Any outstanding wages, bonuses, or benefits: A thorough review of your employment contract will ensure that all outstanding payments are included in the settlement offer.
• The impact on your future employment: We will help you consider the long-term effects of signing the agreement, especially if it includes clauses that could hinder your future job opportunities.

If your settlement agreement does not reflect your legal entitlements, our settlement agreement lawyers will negotiate better terms or advise on alternative legal action.

Legal advice for settlement agreement disputes

If a dispute arises over the terms of your settlement agreement, our settlement agreement solicitors can help. Common disputes include:

• Unfair or unclear clauses: If there are terms that are vague, misleading, or unfair, we can advise on how to resolve them.
• Non-payment of agreed sums: If your employer fails to pay the compensation or benefits agreed upon, we can assist in enforcing the payment.
• Breach of contractual terms: If your employer violates any terms of the settlement agreement, we will help you take the necessary steps to hold them accountable.
• Employer misconduct: In cases where the employer has acted inappropriately or unlawfully, we will provide advice on your next steps.

Our experienced settlement agreement lawyers will advise you on the best course of action, whether that means further negotiation or taking legal steps to enforce your rights.

Ensuring your employer follows the correct procedures

Employers must follow correct procedures when offering a settlement agreement. These include:

• Providing you with a reasonable time to consider the agreement (usually 10 days): This is crucial because you need time to seek settlement agreement advice and fully understand the terms before signing.
• Allowing you access to independent settlement agreement legal advice: Employers must ensure that you have the opportunity to consult with a lawyer who is not connected to the company.
• Avoiding undue pressure or coercion: Settlement agreements should be entered into voluntarily, without any pressure from your employer.

If an employer does not follow these procedures, the agreement may not be legally enforceable. Our settlement agreement solicitors will ensure that your rights are fully protected, and that any agreement you sign is legally valid.

FAQs about settlement agreements

What is a settlement agreement?

A settlement agreement is a legally binding contract between you as an employee and your employer. In the agreement you agree not to pursue legal claims against your employer in exchange for compensation or other benefits.

Can an employee request a settlement agreement?

Yes, employees can request a settlement agreement, particularly in cases of workplace disputes, redundancy, and also if/when they want to exit employment amicably.

How do I negotiate a settlement agreement with my employer?

Negotiating a settlement agreement involves discussing terms such as compensation, references, and restrictive covenants. It is advisable to seek legal advice on any draft agreement to ensure you receive the best possible terms.Who pays for a settlement agreement? 

Employers typically cover the cost of legal advice required for a settlement agreement. However, the amount they offer may vary, and additional legal fees may need to be negotiated.

What happens if you breach a settlement agreement?

If you as an employee breach your settlement agreement, your employer may refuse to pay the agreed compensation or take legal action to recover any losses caused by the breach.

What happens if an employer breaches a settlement agreement?

 If your employer fails to honour your settlement agreement, you may be able to take legal action, such as filing a claim for breach of contract or pursuing the matter through an employment tribunal.

How long do I have to sign a settlement agreement?

Your employer must allow you a reasonable time (usually at least 10 calendar days) to seek legal advice on your settlement agreement before you sign it.

Are settlement agreements taxable?

The first £30,000 of a settlement agreement payment is usually tax-free if it is compensation for loss of employment. However, payments for notice periods, bonuses, or accrued holiday are subject to tax and National Insurance.

What next?

Monaco Solicitors are the UK’s leading employment law solicitors who only serve employees and who only specialise in employment law. We provide a range of first class settlement agreement services, so if you would like expert settlement agreement legal advice and support, contact us today:

Via this link
By phone: 020 7717 5259
By email: communications@monacosolicitors.co.uk