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Settlement Agreement

A settlement agreement is a legally binding agreement between an employer and an employee.

A settlement agreement is where an employee normally agrees not to pursue action such as unfair dismissal, discrimination or redundancy claims against the employer. In return, the employer normally agrees to pay the employee a sum of money to compensate for their ‘compromised’ rights.

Settlement agreements can be a good way for employers way to make a clean break with an employee. This is because they provide an assurance that the departing employee won’t pursue claims against them later on.

The agreement could also benefit you as the first £30,000 of the termination payment is usually tax free.

Negotiating your settlement agreement

To be legally binding, any agreement you enter into needs to conform to certain requirements.

At TLS Solicitors, we can review your agreement and negotiate better terms on your behalf. We’re experienced in dealing with small businesses and large multi-national organisations and we’ll be 100 per cent on your side.


Your employer is not legally obliged to give you a reference. However, you’ll probably be as concerned about your professional reputation as you are about your financial settlement.

We can write a reference on your behalf for your employer to agree and provide as an annex to your settlement agreement. This means any reference your employer provides about you will be the one you’ve seen and agreed.

With our efficient service and unrivalled negotiating skills, we’ll take the entire burden of your settlement agreement off your hands.

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