What is a reasonable settlement agreement?

If you are wondering what a reasonable settlement agreement is, then our team will be able to review and advise on the terms of your agreement.

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What is a settlement agreement?  

It is important to understand what a settlement agreement is and what it does. Unless you know what a settlement agreement does, you do not know what you are signing away by agreeing to one.

A settlement agreement is a formal legal agreement between employer and employee setting out the terms of the employee's exit from the business. The agreement records the agreed settlement terms, often including financial compensation for loss of employment.  

As the settlement agreement is a formal document it is binding on employer and employee once signed by both parties. If you reflect on the agreement after it becomes binding and decide you do not like it, then you cannot start or resurrect employment tribunal proceedings to get a better deal.

What amounts to a reasonable settlement agreement depends on a variety of factors, including the strength or weakness of your claim or potential claim against your employer.  

You may decide to make a counter-offer if you feel you the financial compensation is not suitable in the circumstances.

What goes into a settlement agreement?  

Every settlement agreement is different, but settlement agreements usually cover:

• Your salary and contractual benefits to the date of the termination of your employment.  
• Any bonus or commission payment or share options you are entitled to receive under the terms of your employment contract.  
• Notice pay in accordance with your contract.  
• Holiday pay if you have untaken holidays.
• The continuation of any restrictive covenants in your employment contract or additional covenants.
• A payment to cover the costs of taking specialist independent advice on the terms of the settlement agreement.
• Financial compensation

Why choose Thompsons as your settlement agreement solicitors  

Years of experience in advising on settlement agreements makes Thompsons the solicitors of choice for many people presented with a settlement agreement by their employer. If you are feeling daunted by your employer’s perceived power, then having Thompsons on your side helps redress the balance.

We understand that when you are presented with a settlement agreement you want to take legal advice as quickly as possible, so you have the information you require to move forward. We provide expert legal advice delivered efficiently and without the use of unnecessary or complex legal jargon.

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