Settlement agreements are legally binding agreements between an employer and an employee. A settlement agreement between an employer and an employee allows for a clean break in the employment relationship. The employee on signing a settlement agreement waives their right to bring a tribunal claim in return for an agreed sum. If you are considering a settlement agreement as an employee, expert advice from an experienced employment solicitor is essential to ensure your best interests are met.
When is a settlement agreement offered?
They are usually offered in one of the following circumstances:
- Where an employment tribunal is imminent or threatened, and the parties agree on a deal.
- Where an employee is dismissed for a “fair” reason – such as redundancy – but the employer wants to be sure that the employee is not going to bring a claim.
- Where an employer decides – for whatever reason – that they no longer wish to work with an employee but do not wish to follow the normal employment law procedures for dismissal.
They usually follow a similar format with standard clauses.
ACAS has produced some important guidance which is worth a read:
Expert settlement agreement advice Sheffield
Settlement agreements must be made in writing and can be offered at any point in the employment relationship. Typically, a settlement agreement will include some form of payment to the employee and will often also include a work reference. It is important for employees to remember that settlement agreements are entirely voluntary, and you should not feel pressured into signing one. The employee considering a settlement agreement must seek legal advice. Fees for legal advice are typically paid by the employer. Settlement agreements can be used to resolve ongoing workplace disputes, and agreements can be proposed by either the employer or the employee, although it is typically the employer who initiates the process.
How settlement agreement payments are treated for tax purposes depends on the basis on which they are paid. Generally speaking, the first £30,000 compensation for the settlement is tax free, but this does not apply to all types of payment, and taxation will differ according to a range of considerations. See our page on settlement agreements and tax for more information.
How we can help
Not only can we advise you on which terms are fair and appropriate, we can help you achieve the best possible outcome. Our employment lawyers are specialists in their fields. If you are an employee requiring legal assistance with regards to a settlement agreement with an employer, we can help. We work hard to ensure your best interests are paramount throughout. Our experience in handling settlement agreements for clients and our practical and down-to-earth approach to legal advice will help you make the right choices.
- Quickly and efficientlyadvise you on the written terms
- Negotiateon your behalf
- Normally we can do this on a fixed fee basis
Ironmonger Curtis has an excellent reputation for getting results, and for jargon-free, common-sense advice. You can rest assured you are in good hands with us. Speak to us today for settlement agreement advice.
Contact our Settlement Agreement Lawyers Sheffield
Ironmonger Curtis is a specialist commercial law firm based in Sheffield and serving Rotherham, Chesterfield, Barnsley, Dronfield and further afield. Our solicitors provide down-to-earth advice to individuals and businesses on all aspects of employment law and we pride ourselves on our personal approach that has allowed us to forge long-term relationships with our clients. Ironmonger Curtis’ expert solicitors also provide advice on company & commercial law, intellectual property, mergers and acquisitions, commercial litigation and commercial property. We are respected for our high level of service and efficient delivery of advice in time-sensitive situations.
For more information on settlement agreements and how our solicitors can help, call us on 0845 225 2635 or fill in our online contact form and we will get back to you shortly.