At Greatwest Law Solicitors, we provide fast, professional, and independent legal advice on Settlement Agreements (also known as Compromise Agreements). Whether you are an employee offered an agreement or an employer seeking to resolve a dispute confidentially, our experienced employment law solicitors will guide you through every stage to protect your rights and secure the best possible outcome.
Independent Legal Advice
Negotiation and Review
Employer Drafting
Redundancy Support
Executive Exits
Restrictive Covenants
At Greatwest Law Solicitors, we act for both employees and employers across the full spectrum of settlement agreement work. Our expertise ensures that every agreement is legally compliant, financially fair, and strategically sound. Below is a detailed overview of the services we provide and how our clients benefit from engaging our firm.
Our Service
Our service goes beyond fulfilling a requirement. We function as your statutory protector and legal certifier. Our expertise lies in aggressively negotiating a package that reflects the true value of the claims you are waiving.
We dedicate the consultation to translating complex legal terminology into clear, understandable language. We explicitly detail which of your statutory rights (e.g., unfair dismissal, discrimination, unlawful deduction of wages) you are surrendering in exchange for the compensation. This prevents any future successful claim that you signed under duress or without full understanding.
We ensure maximum utilisation of the £30,000 tax-free allowance for ex-gratia termination payments, providing expert advice to ensure payroll accurately distinguishes between taxable sums (like accrued salary or Pay in Lieu of Notice—PILON) and the non-taxable termination element.
We scrutinise the SA for all contractual obligations, ensuring accurate and full payment for outstanding bonuses, commission, share scheme entitlements, and accrued but unused annual leave, leaving no money on the table.
We insist on the inclusion of a binding clause requiring the employer to provide a positive, pre-agreed written reference (often an agreed form of words). This eliminates the risk of a detrimental or ambiguous reference sabotaging your next job application.
We review clauses restricting your activity after leaving (e.g., non-compete periods, non-solicitation of clients). We challenge any covenant deemed excessively long, broad, or unreasonable, ensuring your right to pursue your career is not unfairly limited.
The employer will often seek warranties from you confirming that you have not breached any company rules. We review the scope of these indemnities to ensure they are reasonable and do not expose you to future liability for actions that were standard practice during your employment.
We review confidentiality clauses to confirm they meet legal standards. Crucially, we ensure the SA explicitly states that no clause can restrict your ability to make a Protected Disclosure (whistleblowing) to a prescribed body (e.g., HMRC, the FCA) or impede you from reporting a crime, as required by UK law.
An SA is a legally binding contract between an employer and an employee that settles specific statutory and contractual claims the employee might have (e.g., unfair dismissal or discrimination). It is primarily used to terminate employment or resolve an existing dispute quickly and confidentially, providing legal certainty to the employer.
The employee must receive Independent Legal Advice (ILA) on the terms and effect of the agreement from a qualified solicitor or certified person. Without the solicitor’s signed certificate, the agreement is invalid under Section 203 of the Employment Rights Act 1996.
In almost all cases, the employer pays a contribution towards the employee’s legal fees for the ILA. Our firm ensures this contribution is sufficient to cover the full fee, meaning the service is typically provided at no direct cost to the client.
No. Signing an SA is entirely voluntary. An employer may offer financial incentives to encourage signing, but the employee is always free to decline the offer and pursue an Employment Tribunal claim instead.
There is no fixed time limit, but the employee is often given a short window (e.g., 7-14 days) to seek advice and sign. The agreement cannot be signed until the employee has actually received the ILA.
Sums paid to the employee purely as compensation for loss of employment (known as ex gratia payments) can be paid tax-free up to a statutory limit of £30,000. Our role is to ensure the payment is structured correctly to maximise this tax efficiency.
No. Under current UK tax rules, most payments covering the notice period (PILON) must be treated as taxable earnings and are therefore subject to income tax and National Insurance Contributions (NICs), regardless of whether they are paid as a lump sum.
No. Payments that an employee is contractually entitled to receive anyway, such as accrued bonus or holiday pay, are treated as standard earnings and are subject to tax and NICs. Only the additional compensation over and above entitlements qualifies for the £30,000 tax exemption.
A good SA will include a clause specifying a legally binding, agreed written reference that the employer is obligated to provide to prospective employers. Our action ensures this reference is positive and consistent, protecting your reputation.
In many corporate guarantee and employment Settlement Agreement cases, the lender or the employer pays the solicitor’s fee for the ILA. In private property matters, the signatory is usually responsible for the fee.
These are clauses that limit an employee’s activities after they leave (e.g., non-compete clauses, non-solicitation of clients/staff). We negotiate these to ensure they are reasonable in scope (time and geography), preventing the employer from unfairly blocking your ability to work in your sector.
No. While SAs require strict confidentiality regarding the terms and the circumstances of the exit, they cannot legally prevent disclosure to your immediate family, professional advisers (like doctors/lawyers), or prescribed regulatory bodies under UK whistleblowing legislation.
This clause prevents both parties (the employee and often the employer’s senior staff) from making negative or disparaging comments about the other party. We often ensure this clause is mutual, protecting the employee’s reputation from negative internal commentary.
No. The solicitor provides advice; the decision to sign remains entirely yours. However, if you sign against strong advice, you do so with full legal knowledge of the potential consequences.
Since the SA is a legally binding contract, the employee can sue for breach of contract in the civil courts. The ability to do this is a key protection offered by the agreement.
Generally, no. You waive your right to bring the specific claims listed in the agreement. However, an SA cannot legally prevent claims regarding latent personal injuries (unforeseen at the time of signing) or future claims that arise after the agreement date.
We scrutinise the agreement’s indemnity clauses. We ensure the employee is fully protected and indemnified by the company against any liability arising from company matters that occurred while they were employed, provided the employee acted lawfully.
