The Benefits of Employment Settlement Agreements

20 June 2022
We understand that it can be tricky to navigate through an employment relationship that has come to an end, especially when there are still outstanding issues that need to be addressed and resolved. Employment Settlement Agreements can be extremely useful in helping both employers and employees to resolve matters.
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Here at John Fowlers Solicitors, we’re experienced in helping both employees and employers with settlement agreements. Wondering if a settlement agreement is the best route forward? Our team has compiled some useful information on Settlement Agreements. 

What is an Employment Settlement Agreement?

An employment Settlement Agreement is a legally binding contract which is entered into voluntarily between an employer and an employee. They are often a useful way for both parties to resolve a range of matters as an employment relationship comes to an end. However, it is important to note that when you sign the agreement, you will often be relinquishing your right to take any claims against your employer to an employment tribunal. 

What are the Benefits of an Employment Settlement Agreement?

It can be difficult to determine the best course of action when it comes to dealing with an employment relationship that is coming to, or has come to, an end. A Settlement Agreement is usually only necessary if there are outstanding issues that need to be resolved between the parties. Generally, there are a number of benefits that come with choosing a Settlement Agreement. 


Confidentiality is an extremely important part of the Settlement Agreement, particularly for the employer. Depending on the circumstances and the type of agreement, you may find there are different degrees of confidentiality. In some cases, scope may be reduced to allow the employee to confide in those closest to them, for example a spouse or family member, or to be able to tell future employers of the circumstances surrounding their departure. It’s important that both parties are extremely clear on the rules around confidentiality. 


Choosing a Settlement Agreement can provide certainty for both parties. For an employee, a Settlement Agreement is a legally-enforceable contract which guarantees that a financial award will be made, whereas an Employment Tribunal involves the risk of the claim being dismissed. For employers, Employment Tribunals are notorious for being unpredictable and time consuming. Employers will have the certainty that the issue will be resolved more quickly.


Settlement Agreements can save a lot of time and outcomes can often be reached quickly in comparison to Employment Tribunal proceedings. 


Employees will have the security of the termination document which will clearly explain the financial settlement and any other terms that have been agreed. In a similar way, employers will be protected against any future claims made by that employee. 

Do I need a Solicitor for Employment Settlement Agreements?

You are legally required to take independent legal advice before signing a Settlement Agreement. The Settlement Agreement solicitor will advise you on what the agreement means for both parties. 

Still unsure if a Settlement Agreement is the right option for you? Our experienced team of employment law experts will be able to provide you with all the information you need to know about Settlement Agreements. We’re also experienced in guiding employers and employees through Employment Tribunal proceedings. At John Fowlers Solicitors, you can rest assured that our solicitors will provide you with detailed advice at affordable prices. 

If you require any further information about Settlement Agreements or any other employment law related issue, please contact Karen Morovic. We’re also experienced in providing representation and legal advice on a range of other employment law matters. 

Speak to an expert:
Karen Morovic 
01206 593433