If you have been offered a settlement agreement by your employer, it is important to understand your rights, the terms of the agreement, and whether the compensation offered is fair. At DTM Legal, our experienced Employment team will explain your options clearly, negotiate on your behalf where appropriate, and ensure your legal and financial interests are protected.
What is a Settlement Agreement?
A settlement agreement is a legally binding contract between an employer and an employee, usually offered when employment comes to an end. In it, you agree not to pursue certain claims against your employer, such as unfair dismissal or discrimination claims, in exchange for financial compensation and/or other agreed terms.
For the agreement to be legally valid, you must receive independent legal advice from a qualified solicitor. Your employer will usually contribute towards or cover the cost of that advice.
Key Considerations When Presented with a Settlement Agreement
When you are given a settlement agreement, you should take time to understand the implications before signing. Key considerations include:
- Compensation: Is the financial sum being offered fair and in line with your contractual and statutory entitlements?
- Notice Period: Does the agreement address your notice period, or include payment in lieu of notice (PILON)?
- Tax Treatment: Are the payments being made tax-efficiently within HMRC rules?
- Confidentiality Clauses: Are the confidentiality obligations reasonable and proportionate?
- References: Has your employer agreed to provide an agreed reference to support your future employment?
- Restrictive Covenants: Are any post-employment restrictions being introduced, extended, or enforced?
- Waiver of Claims: Are you clear on exactly which claims you are giving up the right to bring in the future?
Our Settlement Agreement Services
At DTM Legal, we guide you through the entire process with clear, practical advice. Our services include:
- Reviewing the settlement agreement in detail and explaining its implications
- Advising you on whether the financial package and terms are fair
- Negotiating with your employer to improve the offer where appropriate
- Advising on tax treatment and payment structures
- Ensuring you understand all confidentiality, non-disparagement, and restrictive covenant clauses
- Securing agreed references and exit arrangements
- Completing all necessary legal formalities to ensure the agreement is valid
Why Instruct DTM Legal?
Settlement agreements can have lasting implications for your career, finances, and legal rights. Our Employment team have expertise in representing employees from a diverse range of sectors and levels of seniority, from junior staff to directors and executives, ensuring you leave on terms that work for you.
We are approachable, responsive, and focused on achieving the best possible outcome for your situation. Our advice is clear, pragmatic, and always in your best interests.
Get in Touch
If you have been offered a settlement agreement, contact our Employment team today on 01244 354800 / 0151 321 0000 or email employment@dtmlegal.com. We will guide you through the process, safeguard your rights, and help you secure the best possible terms.
