Divorce & Family
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When it comes to settlement agreements, it’s vital you receive expert legal advice to protect your interests and defend your rights. We acknowledge that if you’re seeking assistance with an employment law matter, it’s likely you’re facing a life-altering set of circumstances. Our solicitors are available to support you throughout this entire process and will work with you to ensure that you achieve the best possible outcome.
Our solicitors are available to provide support remotely through Zoom or over the phone. We’ll stay in touch in whatever way is most convenient for you, and will ensure that our advice is always easily accessible.
Our solicitors’ office in Swansea is conveniently located in the city-centre with good links to local public transport.
5th & 6th Floors Princess House, Princess Way, Swansea, Mid Glamorgan SA1 3LW
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Monday – Friday: 9am – 5:15pm
Our solicitors have years of experience working with clients from across the UK. No matter the details of the agreement or the circumstances surrounding it, we’ll be available to support you through this challenging time by supplying expert and prompt advice.
When it comes to settlement agreements, our legal services are available at no cost to you, as your employer pays. Get in touch today to arrange your consultation and discover your options.
For a settlement agreement to be legally binding, it must be reviewed by a professional before you sign it. Poole Alcock's employment law solicitors will review the proposal to ensure your interests are protected and that you are being fairly compensated.
When it comes to employment law matters, staying informed is vital. We offer same day assistance to ensure you're well-prepared to address the circumstances you are facing.
We'll stay in touch in whatever way suits you best, with our solicitors being available to conduct meetings virtually over Zoom/calls.
Our team has years of experience in handling employment settlement cases with clients from across the UK. When you work with us, you can rest assured that your matter is being handled effectively and professionally.
To check how much your settlement agreement might be worth, feel free to use our handy Settlement Agreement Calculator.
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Our solicitors offer sector-spanning assistance with settlement agreements, ensuring that your rights are protecting and that you are legally supported through this challenging time. We’re proud of the exceptional service we offer, with our team having assisted clients from across the UK with their settlement agreement matters.
When you choose Poole Alcock to assist you with your settlement agreement, you can rest assured that your matter is being handled expertly by our professional team of employment law solicitors.
At Poole Alcock, we recognise that if you’re seeking out assistance with a settlement agreement, you’re likely facing a life-changing set of circumstances. We’re committed to supporting you through this process by providing expert legal assistance, ensuring that your rights are protected and your employer’s obligations to you are met.
We understand that when it comes to resolving matters of this nature, it’s paramount that we do so effectively and swiftly. You won’t experience any unnecessary delays and we’ll always fight for your interests, with our solicitors being committed to delivering the best outcome for you.
Please see below for our most frequently-asked questions.
Most settlement agreements are intended to cover every possible type of claim you could bring against your employer – they are designed to be a clean break and draw a line under absolutely everything. That means you will waive/surrender your rights to bring statutory and contractual claims and certain claims for personal injury.
That said, there are very few exceptions to this: some types of claim cannot be waived even with a settlement agreement. The most common example is personal injury where you are unaware of the injury at the time of signing the agreement. For example, if you were unwittingly exposed to asbestos at work, the settlement agreement wouldn’t prevent you from bringing legal action against your employer if you discovered, years later, you had developed asbestosis due to that exposure.
If you are an employee and you need advice on the terms and effect of a Settlement Agreement then please do get in touch. We can advise you on the options available to you and work out whether it is in your best interest to accept the settlement or whether there may be scope for negotiating a better deal for you.
If you are an employer and are considering using a Settlement Agreement to end an employment relationship then please do get in touch as we’d be happy to discuss your options and what a fair commercial settlement might look like and draft any required documentation.
However, do remember that depending on the circumstances, your employer might be able to dismiss you fairly anyway. If you reject the offer, you might not get this offered to you again. If you feel you’ve been treated badly, you could still bring a claim after turning down a settlement, but you might not be awarded as much money as you were offered initially. You might also incur legal costs in bringing a claim and time and the stress of litigation also needs to be considered.
The terms of a settlement must be agreed by both parties and we will be able to advise you about what would be reasonable in your circumstances.
It is also worth noting that if you do take advice from a solicitor about the terms and effects of a Settlement Agreement, but you decide not to accept, you may still have to pay your solicitor’s fees. Your employer’s legal fee contribution is only valid if you sign the settlement agreement.
As it is a legal requirement for employees to have independent legal advice on the terms and effect of a Settlement Agreement, it is common practice (although not a legal requirement in itself) for employers to agree to contribute towards your legal fees and for this to be paid to us directly by your employer. At Poole Alcock we can usually cap our fees at your employer’s contribution to ensure that you are not out of pocket as a result of the Settlement Agreement process.
It’s important that you fully understand what leverage you have in this regard and that you are able to manage your own expectations. There’s no use in asking for 2 years’ salary as a termination payment if your claim is for unfair dismissal where the maximum that a Tribunal can award is 12 months’ salary (together with any basic award). On the other hand, if your role has been placed at risk of Redundancy and your employer’s settlement offer is less than your statutory redundancy entitlement then it wouldn’t make much sense for you to accept their offer.
With negotiating a Settlement Agreement, you also need to consider whether there are any other ways that you can enhance to terms of the Agreement. Aside from the financial aspect of the Agreement, this could be to agree that; you keep certain company property after the Termination Date, the employer removes or reduces the impact of any post-termination restrictions or for you to be placed on garden leave during your notice period (or for you to receive a payment in lieu of your notice period if this would be preferred).
The success of any negotiations will ultimately depend on an employer’s willingness to engage. Your employer might be worried about damage to their reputation or the expense of defending a tribunal claim. On the other hand, they may be perfectly prepared and content to defend any claims if their commercial offer for settling isn’t accepted. We can discuss and formulate the best strategy depending on your employer’s motivations and anxieties.
Of course; depending on how the process is managed, this could easily jeopardise the ongoing relationship if a Settlement is not reached. Likewise, this may impact on staff morale if it’s being used as a substitute for good HR and management practices.
In addition (for employers), as Settlement Agreements usually provide an enhanced payment to incentivise an employee to sign it, they can be quite costly. Although this should be offset against the potential long-term savings – it avoids the need to carry out the potentially lengthy and convoluted process and removes the risk of getting that process wrong and landing yourself a Tribunal claim against a disgruntled employee.
Settlement Agreements allow for a clean break and can be a speedy, stress-free and cost-efficient way of concluding the employment relationship or resolving an existing dispute. This gives an employer certainty and reduces anxiety around an employee potentially bringing a claim against it. The employee usually receives a payment that they wouldn’t ordinarily be entitled to and avoids the need to commence time-consuming, stressful and costly litigation.
For both employers and employees, the terms can be mutually agreed which means that a Settlement Agreement may provide for an agreed reference and permit an employee to make an announcement to colleagues in relation to their departure.
Generally, a tax-free payment of up to £30,000 can be paid to an employee as compensation under the terms of a Settlement Agreement
As Settlement Agreements are only valid once you have taken independent legal advice on its terms, employers usually provide a legal fee contribution. Depending on what the employer is contributing, there is usually nothing for the employee to pay. As it’s a legal requirement for independent legal advice, this provides an opportunity for the employee’s solicitor to check through the agreement to make sure that the settlement package amounts to a fair deal.
Payments could include contractual entitlements such as salary, notice pay and payment for any accrued but untaken annual leave. It may also provide payments for bonuses and commission depending on the circumstances. It is likely to also include any statutory entitlements i.e. statutory redundancy payment in a redundancy situation.
A Settlement Agreement may also provide for an ex gratia payment as compensation for an employee’s loss of office. This is usually the incentive for an employee to sign the agreement but the actual payments will be very much dependent on the circumstances of each particular case. There are a number of factors to consider, such as;
Where an employer has taken steps to fairly dismiss an employee, an employee may be happy to leave with their notice pay and an agreed factual reference. For employees whose employer has breached their employment rights, the figures could be much higher.
It’s important that the deal struck is fair. But each case can be completely different and it will entirely depend on the particular circumstances. Here are some examples:
It means the draft agreement, and negotiations around it, is ‘off the record’ and cannot be shown to a court as evidence of admissions against either party. The legal concept of ‘without prejudice’ is based on the principle that it’s helpful for parties to speak freely when trying to come to an agreement to settle an existing dispute. If they know that anything they say in these discussions cannot be used as evidence against them, it allows the parties to be more open.
Settlement Agreements are often proposed in a genuine attempt to settle an existing dispute. The alternative to a Settlement Agreement usually entails a long drawn out process that neither party wishes to follow.
For example, where the employee is not performing well or and neither party wishes to go through a long capability process – a settlement agreement could be proposed as an alternative to this. It could also be used where there are allegations of gross misconduct – rather than proceeding with a disciplinary procedure and running the risk of a summary dismissal, employees might be able to agree a payment in lieu of notice and an agreed reference.
Another common scenario where Settlement Agreements are used is in a redundancy situation to record the terms of a voluntary redundancy which avoids the need for a potentially lengthy and stressful redundancy process.
We check the content of your settlement agreement, making sure you understand the terms and are aware of your rights. We also consider whether or not they are offering you enough money, and if not then we will negotiate this with your employer.
The general position for payments provided for under the remit of the Settlement Agreement is as follows:
Contractual Payments should be taxed and subjected to NICs in the usual way – that is to say, payments made arising from an obligation to make the payments under the contract of employment. This includes payment relating to benefits in kind, notice pay (or payment in lieu of notice), salary, bonus or commission payments.
Termination Payments – this includes non-contractual payments relating to loss of office. For example ex-gratia payments, compensation for breach of statutory rights and redundancy payments. The first £30,000 of the total termination payment may be exempt from tax and NIC. Any excess above this threshold should be taxed and subjected to NICs appropriately.
It is important that the payments arising under the Settlement Agreement are taxed and subject to NIC appropriately. Whilst it is the primary responsibility of the Employer to ensure this, it is common for the Settlement Agreement to provide for a specific tax indemnity to re-allocate this risk to the Employee.
We will advise you on your settlement/compromise agreements, ensuring you understand your rights. We will also negotiate with your employer if we think you are entitled to more. Our solicitors understand the complexities of dealing with compromise or settlement agreements and will provide you with fair advice.
A settlement agreement is a contract where you and your employer agree to resolve a particular employment issue (or issues) on specific agreed terms. Under the terms of a Settlement Agreement, you will give up your right to bring any claims against your employer, in return for a sum of money (a Termination Payment).
It is commonly used where the employment relationship is about to end but could also be used to settle an existing dispute where the employment relationship is ongoing.
Partner-Head of Employment Department
Solicitor - Employment
Excellent communication and response times, felt relieved at the efficiency and friendliness of everyone I spoke to. Jamie and Kellie were fantastic and I am so grateful for the excellent service I received.
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