I’ve Been Offered a Settlement Agreement:

Settlement agreements were formerly known as compromise agreements, and are agreements between employers and employees. When an employee signs a settlement agreement, he agrees to not take his employer to court for a sum of money. Employees have rights such as the right against discrimination on protected grounds and the right against being unfairly dismissed. You cannot sign away these rights without first taking independent legal advice; you need legal counsel to accept a settlement agreement. The Law Clinic will be clear in explaining your rights and forthright in helping you to protect them.


The most important aspect of any settlement agreement is the amount of compensation that the employer is prepared to pay you. The Law Clinic has been before employment tribunals in the past, as such, we can immediately tell you whether your award should be larger. We always negotiate a generous award for clients, and have escalated the claim to the employment tribunal.

Is My Settlement Agreement Taxable?

It is possible that the first £30,000 of a settlement payment under a settlement agreement can be paid tax free. This is a considerable bonus when agreeing settlement terms.

Full and Final Settlement:

In signing a settlement agreement you are agreeing to sign away your right to bring employment tribunal proceedings against your employer. Typically your employer will require you to sign an all-encompassing waiver covering all potential claims.

Restrictive Covenants:

Any post-termination restrictions in your employment contract that seek to prevent you from working for a competitor, soliciting, dealing with your former clients, or poaching employees are only enforceable if your employment contract is not breached when you are dismissed.


Your employment is being terminated you will need to find another job and a reference from your previous employer is an important part of securing alternative employment. When negotiating a settlement agreement you have the ability to agree the content of the reference your employer will give to potential future employers.

Our Fees:

Your employer will pay our legal costs. For your settlement agreement to be valid, you need to have taken independent legal advice before signing the agreement. In most cases, your employer will want the certainty that the agreement is legally enforceable in order to prevent you from taking any action against it in an employment tribunal. This means that there’s no charge to you!

Real Word Example:

Emily* has just been offered a settlement agreement after being being unfairly dismissed. Re-entering the workforce mid-way through her career is a destabilising challenge, and she worries the settlement offered by her employers is not enough to balance the life-changing effects of her dismissal. She feels pressured to sign the agreement, and worries that her employers leave her no choice but to accept an offer that cannot support her and her family. In this scenario, The Law Clinic would review the details of Emily’s case, and determine whether she is eligible for a larger settlement. If it is advantageous, The Law Clinic would negotiate for a larger settlement on Emily’s behalf. The Law Clinic would also negotiate on her behalf for a reference that supports Emily as a competitive candidate in future job applications.

*”Real World Examples” are hypothetical legal situations with fictitious characters unrelated to The Law Clinic’s previous cases.