Settlement Agreements

At Franklins Solicitors, we advise employers on using Settlement Agreements to resolve disputes or end employment relationships on clear, lawful terms. Our goal is to protect your business while ensuring certainty and minimising the risk of tribunal claims.

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Law for life

What is a Settlement Agreement?

A Settlement Agreement (formerly known as a Compromise Agreement) is a legally binding contract between employer and employee. Under the agreement, the employee usually receives a financial payment in return for waiving their right to bring claims against the employer in an employment tribunal or court.

Settlement Agreements are commonly used where employment is ending, such as in cases of redundancy, disputes, or agreed exits. They provide both parties with a clean break and legal certainty.

Employers often enter into Settlement Agreements to:

Avoid the Time, Cost, and Risk of Defending Tribunal Claims.
Ensure Confidentiality Around a Dismissal or Redundancy.
Provide Certainty when Resolving Workplace Disputes.
Offer Enhanced Redundancy or Early Retirement Packages.
Agree Post-employment Restrictions or References.

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How are Settlement Agreements Concluded?

For a Settlement Agreement to be valid:

The Employee Must Receive Independent Legal Advice (Usually with a Contribution to Costs Paid by the Employer).
The Terms of the Agreement Must be Clearly Set Out and Mutually Agreed.
Compensation Offered will Depend on the Circumstances and Strength of any Potential Claims. The First £30,000 Can Usually be Paid Tax-free, but Contractual Payments Remain Taxable.

Speak to our Employment Team

Protect your business with proactive, commercially focused legal support. Speak to our employment law team today to resolve workplace issues quickly and confidently.

Contact

Sara Marshall

Associate Partner

Employment

How Franklins Solicitors Can Help

We combine technical expertise with a commercial approach to help employers use Settlement Agreements effectively. Our services include:

Drafting & Negotiation

Preparing legally compliant agreements
tailored to your situation.

Risk Assessment

Advising on the merits of using a Settlement Agreement in specific cases.

Dispute Resolution

Using agreements to resolve conflicts
efficiently and cost-effectively.

Protection Clauses

Including confidentiality, references, and restrictive covenants where appropriate.

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Families across the region have relied on us for decades, valuing our approachable service, practical advice and proven results.

eMPLOYMENT