Settlement & Compromise Agreements

At TEN Legal Solicitors, we deal with compromise agreements (now known as settlement agreements) almost weekly.

We provide fast, efficient independent to employees, which in the vast majority of cases is free to you as employee, as the employer pays our fees for advising you on the agreement.

Most people are still referring to these agreements as compromise agreements but they are now termed settlement agreements by the Government since earlier this year. In practical terms there is little difference between the terminology.

A settlement agreement, or compromise agreement, is a legally binding contract between an employer and employee to bring an employment contract to an end on agreed terms. Due to the nature of settlement agreements, it is a legal requirement that you receive specialist legal advice before signing one. An expert employment lawyer will be able to advise you on how your outcome would differ dependent on whether you sign a settlement agreement or decide to pursue the case at an employment tribunal. We can then advise you on the best action you can take regarding the compromise agreement.

Compromise agreements are offered for a variety of different reasons. A common approach by employers is related to enhanced redundancy, but equally, there may be an underlying dispute such as a grievance, a disciplinary issue, allegations of some kind of discrimination or long term sickness absence.

Equal pay disputes

If you need legal support with a Settlement agreement, reach out to us today.

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Making a claim for constructive dismissal

Settlement agreement – why is a legal advisor compulsory?

For a settlement agreement to be binding, it is a legal requirement that the employee must have been independently legally advised. As part of this process the settlement agreement solicitor should explore with you and consider:-

  • your statutory rights– such as whether you may qualify to make an unfair dismissal claim.
  • your employment contract– what are your contractual rights to notice or other employment benefits such as notice period, commission, a bonus, health cover and holidays?
  • the possibility of an Employment Tribunal claim– and what type.
  • the potential for you to secure suitable alternative employment after you leave– how long might it take for you to get another job and what is the job market like for your type of work and your level of experience?
  • the financial package offered in the employment settlement agreement– in particular, whether you are entitled to the ex gratia amount tax free, whether your employer has sought to include restrictive covenants in the agreement, do you need to negotiate a helpful reference and whether there are realistic prospects of negotiating a better financial offer.

Some employees just sign off others hold out and negotiate

Sometimes, employees simply want fast advice and to sign off on the agreement, others want to know about the prospects of negotiating a more favourable financial package.

Whichever is the case, our specialist employment lawyer, Ben Jones, will guide and assist, whether the underlying situation is redundancy, possible constructive unfair dismissal or otherwise.

Remember also that you do not have to sign the agreement, you can refuse or try to negotiate. Before refusing you should however carefully consider the alternatives and possible outcomes of doing so.


If you require any further assistance from a legal representative, please do not hesitate to get in touch on 0161 402 0213, email contact us online.


0161 402 0213