Settlement (Compromise) Agreements

Site updated on February 17, 2020

Your Employer may ask you to sign an agreement that you will not make any claims to Tribunal connected with your employment – this may be over your Dismissal or Redundancy, or some aspect of discrimination or breach of contract. This usually occurs when you are parting company with your Employer, but not always. This will usually be preceded with a “protected conversation” with your Employer.

Employees can start the ball rolling too by seeking to have a conversation with the Employer about the possibility of leaving with a severance payment.

This used to be called a Compromise Agreement, because you will compromise (give up) your rights to go to Tribunal.

Since 2013 these have been known as “Settlement Agreements”.

If your Employer acts unreasonably, for example by putting you under pressure to sign, this breaches your rights and the agreement may not be valid. You have the right to a cooling off period of up to 10 days to consider a written offer from your Employer. Any offer made has to be confirmed in writing. You do not have to agree the settlement, in which case your employment will continue.

Do not sign any documents until you have taken advice from an authorised advisor. Normally this is a Solicitor, although some Trade Unions have authorised advisors. Many Firms agree to pay the cost of getting independent legal advice, up to a certain amount.

If you need advice on a Settlement Agreement, contact our advice line.

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