Settlement Agreements

Helping employers and employees

When terminating an employment relationship primarily in contentious circumstances, employers are well advised to put into place a settlement agreement. A settlement agreement or compromise agreement is a contract between an employer and an employee which records certain terms of the employee’s departure including in particular any payments made to the employee which are likely to be in excess of what they are contractually due in return for a waiver by the employee of any applicable statutory employment law claims.

For a settlement agreement to be valid, certain conditions (which are set out in section 203(3) of the Employment Rights Act 1996 (ERA 1996), with corresponding provisions in other statutes) must be met. These include, but are not limited to, the following:

  • the agreement must be made in writing; and
  • the employee must receive advice on the effect of the agreement including their ability to pursue their legal rights.
  • The agreement, once signed, is binding on both parties.

How Fortune Law can help

Whether you are an employer looking to negotiate the exit of an employee who is not performing or an employee facing redundancy, Fortune Law will provide expertise in drafting, negotiating and executing a settlement agreement on your behalf.

We have extensive experience in acting for both employers and employees, from junior team members to those holding senior executive or board positions.

Settlement Agreement Fees

Fees for a settlement agreement range depending on the party we are acting for.

Representing the employer

We draft the settlement agreement, negotiate with the employee or his/her legal adviser, liaise with ACAS if the matter has already gone to Tribunal and finalise the necessary documentation. For initial stages we try to give fixed fees followed by estimated or fixed fees for each subsequent stage in the process.

Representing an employee

We always strive to ensure in every case that our fees are covered by the employer as far as possible to minimise financial exposure for the employee. In almost all cases, the employer will make a contribution to legal fees which can be negotiated the more senior the employee is.


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We can help with your settlement agreement

Fortune Law are experienced employment law solicitors, based in the heart of central London.
Speak to a specialist about your compromise agreement needs.

Telephone: 0203 900 8921 or complete the enquiry form.