Settlement Agreements

Settlement agreements can be a very effective way of resolving a workplace dispute and bringing an employment contract to a mutually acceptable conclusion. Our employment law experts can assist with drawing up settlement agreements that allow a dispute to be finalised amicably.

A settlement agreement is legally binding on both parties and in many cases can be a better solution than a tribunal or court case. It’s essential that the settlement agreement is clear, unequivocal and comprehensive and includes terms and conditions which are agreeable to all.

If you would like to negotiate a Settlement Agreement settlement, or you have received one and would like a legal opinion, we can provide technical advice and assistance.

For more information about our employment law services please call us on +44 (0)20 3475 6751 or email info@carterbond.co.uk

More information about Settlement Agreements

Has your employer offered you a Settlement Agreement? Here are answers to some FAQs about Settlement Agreements from legal experts.

Known in the past as Compromise Agreements, a Settlement Agreement is a contract between an employer and an employee which formally ends their working relationship. Both parties must agree to the terms, and it is often used to agree a payment from the employer in return for the employee agreeing not to pursue a tribunal or other legal action. The phrase “waiver of all claims in full and final settlement” is typically found in Settlement Agreements.

You should not sign a settlement agreement until you are certain you fully understand all the terms and implications. It’s highly advisable to seek legal advice to check that the terms of the agreement are fair and enforceable, and that you’re not being asked to yield statutory rights.

Here are some of the most frequent questions we answer on the subject of settlement agreements:

Q: My employer says he will sack me if I don’t sign the agreement - can they do that?

A: No. It is not legal to use intimidation to coerce an employee into signing a Settlement Agreement. Your employer is able to say that disciplinary proceedings will commence if the Settlement Agreement does not go ahead but this does not extend to confirming your dismissal.

The Acas Code of Practice on Settlement Agreements explicitly states intimidation is not permitted. If this occurs, the clause which binds an employee to the agreement without prejudice will no longer apply.

Q: Do I have to sign the agreement on the spot?

A: No. You must be given sufficient time to consider the offer and to obtain legal advice. The ACAS code specifies you should have a minimum of 10 days to reach a decision.

Q: Are there any rights which can’t be superseded by a Settlement Agreement?

A: Yes. Section 91 of the Pensions Act 1995 ensures that any accrued pension rights are protected (other than in very exceptional circumstances). The agreement should specify that these rights are unaffected.

Q: Does my employer have to offer me a Settlement Agreement if I want to leave?

A: No. Your employer is not under any obligation to offer an agreement. However, if you have grounds to pursue action against them such as discrimination, harassment and bullying, they may be inclined to do so.

For more information about your rights under Settlement Agreements, get in touch with us today.

Howard Lewis-Nunn

Howard Lewis-Nunn

Employment Partner / Barrister

e: howard@carterbond.co.uk
t: +44 020 3475 2713
m: +44 07572 823 361


Reena Popat

Reena Popat

Managing Partner

e: reena@carterbond.co.uk
t: +44 020 3475 2724 
m: +44 07931 347 854



We have acted for high ranking City executives and settled for a payout of £5m in relation to significant bonus claims

Acted for an associate in the banking sector who was discriminated against because of their background, and settled for a year’s worth of salary and a bonus

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For more information, or to discuss your requirements, please contact our team on +44(0) 20 3475 6751 or info@carterbond.co.uk