Settlement Agreements

Settlement Agreements – Advice for Employees

What is a settlement agreement?

A settlement agreement is written agreement between an employer and employee under which the parties agree to end their relationship amicably on agreed terms. The agreement may provide  for:

  1. A defined payment for, for instance, enhanced redundancy
  2. Agreed notice pay, or an agreed payment for defined possible theoretical claims (although this will be inevitably without any admission of )
  3. An agreed reference to enable you to gain employment for the
  4. A confidentiality clause restricting what either party can say about the termination
  5. A‘restrictive covenant’ clause which may restrict what you can do in terms of competing with the business later after you have

Sterling Law helps employee-clients throughout the country and particularly throughout Greater London. We specialise in assisting senior executives and the City and the financial sector.

We always try to renegotiate and improve upon any offer put forward to our employee-clients. Unlike many lawyers, we never simply sign off the agreement as it stands, unless those are your specific instructions.

What will it cost me?

Usually absolutely nothing. Commonly, the employer will pay for the legal costs of us advising you in relation to the settlement agreement, even though we are acting entirely in your interests.

This is because it is necessary for an employee to be advised by a qualified independent lawyer for the agreement to be enforceable. We will normally send our invoice directly to the employer.

Why should I have a formal settlement agreement if ending my employment?

If ending your employment, any agreement is not binding unless certain formalities have been complied with. You must have received advice from an independent qualified advisor acting on your behalf, such as a solicitor, who must have professional indemnity insurance covering him or her against the risk of not advising you properly. The advisor must be named in the written agreement and he/she must certify that the statutory conditions have been fulfilled.

If you have any questions in regard to an employment matter please contact our employment solicitor Kuldeep Clair at or 020 7822 1866.