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Employment Settlements

Have you discovered that you’re being made redundant?

If you’ve been selected for redundancy, you could find yourself in a state of panic. Without the promise of a secure job, you’re likely to be worried about your finances and where your next employment opportunity will come from.

To smooth the process, your employer may have offered you an employment Settlement Agreement (previously known as a compromise agreement).

When signed by the employee, the adviser and the employer, this is a legally binding contract that provides for termination payments (such as your notice and other sums). In turn, you will be agreeing not to bring any employment law claims against your employer (unfair dismissal, breach of contract or unpaid redundancy, for example).

Why are employment settlements offered?

Employers offer employment settlements to save time and money when making staff redundant. They don’t want the cost and hassle of tribunals or lots of red tape, particularly if lots of people are being made redundant at the same time.

When done well, employment settlements can make the process of redundancy quick and easy. Employers can turn their attention to other pressing matters in the business, while employees have a financial safety net while they look for a new job (assuming the agreement was fair or generous).

Is my employment settlement reasonable?

Most settlements are reasonably fair because it’s in the employer’s best interest for you to accept it.

However, not all employers are generous with their offers and will try to pay as little as they can – perhaps the legal minimum.

You need to seek independent legal advice to ensure that your employment settlement is fair.

By law (Section 203, Employment Rights Act 1996), you are required to obtain independent legal advice regarding the terms of the agreement. Your lawyer is also required to sign a certificate to confirm that they have complied with this.

Your employer will usually offer a fixed sum to cover your legal fees.

It’s vital to choose a specialist employment law solicitor with sufficient levels of experience in order to provide the most appropriate advice. They will have the knowledge to be able to advise if an offer is unreasonable and help you negotiate better terms if that is what is required – as well as the experience to warn you if you’re throwing away a potentially good deal.

Remember, the settlement is an offer. Your employer can choose to withdraw it, so you must consider if any attempt to re-negotiate will be fruitful. An experienced employment law solicitor will help you to decide.

What if you choose not to accept the employment settlement offer?

Our solicitors can ascertain if you have been dismissed unfairly and help you to take your compensation claim to an employment tribunal.

Coles Miller have extensive experience of these agreements.

In the case of employment solicitor Hugh Reid, this includes success stories such as helping a 31-year-old City software expert to secure a settlement of £784,000.

We are also able to deal with Settlement Agreements within 24 hours of having received the necessary paperwork. We also agree our fees before we carry out any legal work.

Get in touch

For a free no obligation initial telephone consultation with one of our employment law solicitors, contact Coles Miller on 01202 355695 or complete the form below.

Meet the team

Neil Andrews

Partner, Head of Commercial Department and Business Property Law

Hugh Reid


Patrick Herklots