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When it becomes clear that the employment relationship is going to end, a compromise / settlement agreement solicitor can create a legally binding document that dictates the terms of the termination and addresses two main issues: how much the employee will receive as severance pay and the employee’s promise not to pursue any legal claims they may have against the employer.


The content of the document drafted by a compromise / settlement agreement solicitor must benefit both the employee and the employer. For the employer, it is a guarantee that they will not be subject to any legal claims in the future. For the employee, it is a guarantee of how much compensation they will receive when the employment ends. A claim in the London Employment Tribunal does not provide employees with any degree of certainty because there is always a chance they will lose their case.


Most compromise / settlement agreement solicitors when drafting the contract will, at a minimum, address these basic issues:

  • the amount of compensation the employee is to receive
  • the settlement of all claims that the employee has against the employer, and vice versa
  • the extent to which the compensation being paid to the employee is tax-free
  • confidentiality requirements
  • the reference the employer will provide on behalf of the employee
  • restrictions on the future employment the employee may obtain
  • assurances given by the employer and employee
  • agreement not to make derogatory statements about one another
  • list of the statutes under which the employee is agreeing not to bring claims


The compromise / settlement agreement solicitors representing an employer may draft a one sided document and it is important to note that there is no requirement that an employee sign the document if it is not in their interest to do so. An employee has every right to refuse the agreement and retain their right to bring a claim to the London Employment Tribunal if agreement cannot be reached by negotiation between both sides compromise agreement solicitors. Refusing to sign, however, may not be in the employee’s best interest, which is why qualified legal advice is so important to the entire process.


In order for a compromise / settlement agreement to be valid and enforceable, it must meet each of the following requirements:

  • the terms have to be in writing
  • it must address a specific complaint held by the employee
  • before signing the agreement, the employee must obtain legal advice from a statutorily defined qualified adviser
  • the adviser providing the advice to the employee must be covered by professional indemnity insurance
  • the adviser must be identified within the agreement
  • the agreement must specify that all of the legal requirements of a valid compromise agreement have been met

Legal Advice

One of the most critical requirements for a valid compromise / settlement agreement is that the employee obtain legal advice before signing the document. This right to legal advice cannot be waived and exists to protect employees from agreeing to something which they do not fully understand. Under the Employment Rights (Dispute Resolution) Act 1998, the individuals who can provide the requisite advice are qualified trade union officials, advice centre workers and compromise agreement solicitors.


Generally the cost of obtaining the necessary legal advice is covered by the employer. In most cases the employee pays nothing for advice and representation by a solicitor.


Beyond the fact that obtaining legal advice is a requirement, consulting with a solicitor offers a number of benefits. For example, if you are unhappy with the terms presented to you, an experienced solicitor can help you to negotiate new terms. A solicitor can advise you of whether the amount of compensation specified in the agreement is suitable, particularly in light of any legal claims you may have.

In the vast majority of cases these arrangements are a fair and simple way to amicably end an employment relationship. Signing away your rights to bring a legal claim, however, should not be taken lightly. It is always wise to speak with an experienced solicitor to be sure you are making the right decision. If you would like free advice without further obligation from an expert lawyer just use the helpline, email or complete and send the contact form.


HELPLINE 0345 515 0362