Settlement Agreements

A Settlement Agreement is a legally binding contract made between an employee and employer, either during or after employment, which formally records the leaving terms between the parties

A Settlement Agreement also prevents the employee from bringing legal action against the employer in respect of his employment and/or its termination, usually in exchange for a termination payment.

Settlement Agreements offer both the employer and the employee the benefit of certainty and a clean break . An employee will have the security of an agreement setting out what financial settlement the employee will receive, together with clarity on other issues, such as who will provide a reference to future employers and what it will say. The employer, in turn, has the guarantee that it will not have to deal with a future claim by that employee. It is for these reasons that many employers and employees will often enter into a Settlement Agreement , even where an employer has followed a fair process or the employment has ended amicably.


Our team of solicitors can advise employers and employees on the use of Settlement Agreements and the terms of any draft agreement. An Agreement cannot be binding unless an employee has received independent legal advice which the employer must pay for.

We know that employers and employees will usually need quick access to legal advice. We offer a same day service for both employers and employees in both our Newcastle and South Shields offices.

Further information can be found in the ACAS Guide to Settlement Agreements here

Contact us

Whether you are an employer or an employee, if you need advice on a Settlement Agreement call our business team today on 0191 243 8147