Settlement Agreement Q&A For Individuals

If you are an employee and you have been offered a settlement agreement by your employer, you may be wondering what steps to take next.
Here are some Q&As around settlement agreements that we are commonly asked. If you would like to know more, please don’t hesitate to get in touch by calling us on 0113 322 9222 or email us at settlementagreements@consilialegal.co.uk.

Q: Why might I be offered a settlement agreement?

Settlement agreements are commonly offered when there’s a dispute between you and your employer, or when the employer wants to avoid a lengthy and costly legal process. They may also be offered as part of a redundancy process, when your employment is being terminated, or in cases of workplace disagreements.

Settlement agreements can also be offered as part of an amicable exit from a business when a financial package has been agreed between an employer and employee.

Q: Do I have to accept a settlement agreement?

No, accepting a settlement agreement is entirely voluntary. If you’re not happy with the terms or don’t feel it’s the right solution, you can refuse the offer. However, it’s important to carefully consider the offer before making a decision.

Q: What should I do if I’m offered a settlement agreement?

You should carefully review the terms of the settlement and seek legal advice. It’s highly recommended to consult with an employment lawyer or a legal professional who specializes in settlement agreements, as they can explain your rights and ensure you’re getting a fair deal.

Q: Do I need a lawyer for a settlement agreement?

Yes, under UK law (for example), it’s required that you get independent legal advice before signing a settlement agreement. This is to ensure that you understand the terms, especially regarding any rights you might be waiving, such as the right to bring future claims against your employer.

Q: What will a settlement agreement include?

A settlement agreement will typically include:

• The financial settlement (e.g., compensation, redundancy pay, etc.)
• A clause that confirms you waive any future claims against your employer
• Any confidentiality or non-disparagement clauses
• Details on when your employment will end and the terms around your departure
• Any benefits or pension provisions

Q: What happens if I sign the settlement agreement?

Once signed, the settlement agreement becomes legally binding. You will usually be unable to bring any further claims against your employer in the future, as long as the agreement is followed.
However, the agreement may include certain conditions, such as continued confidentiality.

Q: What happens if I don’t sign the settlement agreement?

If you don’t sign the settlement agreement, your employment may continue, or the dispute may proceed through other channels, such as an employment tribunal. If you’re in a redundancy situation, you might not receive the financial settlement offered in the agreement.

Q: Can I negotiate a settlement agreement?

Yes, settlement agreements are negotiable. You can negotiate the terms, including the financial compensation, any references, or other conditions. A lawyer can assist you with negotiating a better deal based on your individual circumstances. You should always be aware that if you do make a counter-offer to your employer, they are entitled to withdraw the offer that has been made to you.