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Advice for business

Settlement agreements

Employment disputes can be very time consuming and expensive to deal with, as well as having the likelihood of causing a lot of stress and a negative impact on an employer’s reputation.


Settlement agreements offer a way to avoid potential disputes and to quickly resolve any workplace conflicts that do arise. They provide a definitive resolution, protecting your organisation cost-effectively.

At Frettens, our employment lawyers are highly experienced in using settlement agreements for employment disputes, so can provide clear, pragmatic support for employers looking to explore this option.

Our employment lawyers in Dorset can help you with:

  • Advice on whether a settlement agreement is appropriate
  • Drafting settlement agreements
  • Negotiating settlement agreements
  • Providing settlement advice for employees (which is a legal requirements)
  • Advice on your options where a settlement cannot be agreed

Get in touch to set up your free initial appointment

Contact our Dorset-based settlement agreement solicitors ay your local branch in Christchurch or Ringwood to set up your free initial appointment.

You can see our fees for defending claims of unfair or wrongful dismissal here.

Our settlement agreements expertise

Advice on the use of settlement agreements

Settlement agreements can be used both where a dispute has arisen or where there is the possibility of a dispute (e.g. when dismissing someone). Our employment lawyers can advise you on whether a settlement is likely to be an appropriate option for your circumstances, for example, if an employee is likely to have grounds for an employment tribunal claim.

Drafting settlement agreements

Settlement agreements must be carefully drafted to ensure all possible outcomes are considered and that the agreement is fair. Our team can draft a settlement agreement that matches your requirements and ensure all of the necessary legal steps are followed to make the agreement legally binding.

Settlement negotiations

Should you need to enter into settlement negotiations with an employee or former employee, our employment lawyers can represent you. We will work closely with you to understand your concerns, then provide expert support during negotiations to keep the process productive and give you the best chance of reaching a suitable resolution.

Settlement advice or employees

It is a legal requirement when making a settlement agreement that the employee receives independent legal advice before signing. This is normally funded by the employer as it is in their interests to ensure the agreement is valid. Our settlement agreements solicitors can provide this independent advice for employees, giving assurance that they are being treated fairly and that the process is legally compliant.

What to do if a settlement cannot be agreed

If you are unable to agree a settlement, then we can help you explore the full range of options available to you. This includes using Acas early conciliation and defending employment tribunal proceedings started by an employee or former employee.

Our employment lawyers can help you prepare for an employment tribunal and represent you at tribunal hearings, making sure you have the support you need to achieve the best available outcome.

Why choose Frettens settlement agreement solicitors?

Our employment lawyers have many years of experience guiding employers across a range of sectors on the use of settlement agreements. We can provide clear, effective advice to give you the best chance of resolving any potential disputes early and avoiding unnecessary time, expense, stress and damage to your reputation.

We are ranked Tier 2 for Employment Law by highly respected client guide the Legal 500, recognising the exceptional quality of our knowledge and skills in the area of employment law.

Our Head of Employment Paul Burton is a member of the Employment Lawyers Association (ELA) as is employment solicitor Chris Dobbs. This reflects our team’s commitment to providing the highest level of expertise for our clients.

Frettens Solicitors is independently regulated by the Solicitors Regulation Authority (SRA).

Ask Us at Frettens

Here are some frequently asked questions on settlement agreements. For any other questions, please feel free to ask us via our online enquiry form and we will be more than happy to help.

You can read Chris Dobbs' comprehensive guide to settlement agreements here.


What is an employment settlement agreement?

Settlement Agreements are legally binding contracts which are signed between an employee and employer. They settle claims which an employee may have arising from their employment such as pay claims or discrimination, or claims following termination of employment such as unfair dismissal.

Usually but not always, settlement agreements will involve a payment by the employer in exchange for the employee agreeing not to bring proceed with any legal claims they may have.

Compromise agreements is just an older name for what was basically the same thing until 2012. There were some slight differences in the regulations which mean that some (increasingly rare) claims still have to be dealt with under the old compromise regime.

When can a settlement agreement be used?

An employer can offer a settlement agreement in a variety of situations, but they are most commonly used in:

  • Redundancies
  • Disciplinary Matters
  • Grievances

I explain these scenarios further in the full article, read here.

What goes in a settlement agreement?

To read more including what goes into a settlement agreement, how to sign, legal advice and more; click here.

How long do settlement agreements take?

There is no set time limit, but employees must be given ‘reasonable time’ to consider the agreement before signing. Acas recommends a minimum of 10 days for this.

In general, using a settlement agreement will be much faster than allowing the matter to go to an employment tribunal. Once a claim is entered with the tribunal, it typically takes around 6 months for a hearing. If you are seeking a swift resolution, a settlement agreement is therefore normally the best option.

What are the rules for a legally binding settlement agreement?

For the agreement to be binding it must:

  • Be in writing
  • Relate to a specific issue
  • Be made by an independent solicitor
  • Name the solicitor who drafted the agreement
  • Set out exactly what has been agreed

Additionally, the employee must:

  • Receive independent legal advice
  • Be given reasonable time to consider the agreement before signing
  • Not be under any pressure to sign

Should a settlement agreement be used for severance?

Chris Dobbs says: "Settlement agreements are one of the safest ways to ensure that a termination other than in accordance with a standard procedure is resolved fully in law. The Evergreen case demonstrates the dangers in not making sure that all matters arising from a termination like this are dealt with in writing and that there is a complete and clean break of the relationship.

Remember that an employee must take independent legal advice on the terms and effects of a settlement agreement. This protects not just them but also the employer who wants assurance that they will not be faced with an unexpected claim."

Read more here.

    Get in touch to set up your free initial appointment with our settlement agreements solicitors

    You can contact our Dorset-based settlement agreement solicitors at your local branch in Christchurch or Ringwood to set up your free initial appointment.