Settlement Agreements Compromise Agreements

What is a settlement agreement (also known as a compromise agreement)?

Settlement Agreement Compromise Agreement

Settlement Agreement Compromise Agreement

A settlement agreement (previously called and sometimes referred to as a compromise agreement or a termination agreement) is a legally-binding agreement that your employer will use to offer you compensation in exchange for you giving up your right to bring a claim in the Employment Tribunal or County Court against your employer. 

Settlement agreements are commonly used to bring the employment relationship to an end in the following circumstances:-

  • By mutual agreement (e.g. the arrangement has not worked out between the parties)
  • A dispute between an employee an employer, e.g. relating to performance issues
  • Redundancy

Compensation for Loss of Office/Employment

It is usual for settlement agreements to provide for compensation for loss of employment.  This is known as a termination payment and up to £30,000.00 can be paid tax-free.  Redundancy payments are included in the tax-free lump sum.

You should also be paid all salary and other benefits due (e.g. accrued holiday pay and notice pay) to the termination date.  These benefits will be taxable.

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Employment References and Announcements

It can be a good idea to ask your employer to agree a reference to be attached to the settlement agreement as they are not legally obliged to provide one.   However, they must not provide a reference which is inaccurate or misleading. Some companies have a policy of providing a factual reference only.  

It is also sometimes possible to agree the wording of an announcement between you and your employer so that your colleagues can be informed about your departure in terms you are happy with.

Settlement Agreements – Cheshire

If you are looking for a Warrington lawyer you need to ask if they are based in Warrington as an 01925 telephone number is no guarantee of this.   Whilst we are based in Warrington, we do cover other areas, including Newton-le-Willows, St. Helens and Widnes. 

Contact me, Diane Massey at, or telephone me on  01925 937070.  Alternatively, complete our Contact Us Form and we will call you.

We now also have a Wigan office which can be contacted on 01942 914004.

What we will do for you:-

  • We will advise on the terms and effect of the settlement agreement
  • We will sign the adviser’s certificate
  • We will invoice your employer direct in accordance with the terms of the settlement agreement
  • We will send out the completed settlement agreement to your employer the same day by first class post
  • If you wish we will also email the settlement agreement to your employer 

Our offices are located just off Junction 8 of the M62, with free on-site car parking and disabled access.

Signing a Settlement Agreement/Compromise Agreement

You should not sign a Settlement Agreement (Compromise Agreement or Termination Agreement) until you have received independent advice and you are fully aware of the terms and effect of the agreement

How long does it take to have a settlement agreement finalised?

The process itself is relatively straightforward and where the terms are agreed between you and your employer it can usually be dealt with in a single consultation.   We will provide you with the necessary legal advice and complete the Adviser’s Certificate (which is a legal requirement of a valid settlement agreement). 

Unfair Redundancy – Employment Law Advice

Do you believe you have been made redundant unfairly?  For example you believe that redundancy was not the true reason for dismissal.  You may be pregnant or raised a grievance and believe that was the reason for your redundancy. 

Has your employer not followed a fair redundancy procedure before giving you notice of dismissal or terminating your employment? 

For more information on unfair redundancy please visit our Redundancy page to find out how to make a claim or telephone Diane Massey on 01925 937070.  Diane is an employment law expert and a fully qualified solicitor who is ready to help you resolve your employment issue. You can contact Diane direct at

More information on employment law 

If you have been made redundant or have another employment law problem you can visit the Employment Law section of our website to find out more Employment Law at DSM Legal Solicitors.  

If you are concerned that the compensation offered by your employer is insufficient we would be happy to negotiate with them on your behalf and will agree with you a fee in advance of any work carried out.

Case Studies

Mr. P came to us with a settlement agreement offering him one month’s gross salary of £900.00 as a termination payment. We offered to look at whether the level of compensation was sufficient and agreed to negotiate with his employer on a no win no fee basis in an attempt to obtain a better settlement. We achieved a settlement of over £8,000.00 without issuing a claim in the Employment Tribunal.

Mrs. R. was offered £15,000.00 by her employer as a termination payment – for a fixed fee we agreed to negotiate with her employer’s solicitors and obtained a settlement of £25,000.00.

On our advice Miss B obtained an additional of 23 days’ pay to take account of accrued holiday entitlement which was not included in the original settlement agreement.

Speak to our friendly solicitors today in confidence for advice on your employment law issue, including advice on your settlement agreement compromise agreement.

Call 01925 937070 to speak to one of our expert solicitors or click here to complete our Settlement Agreement Compromise Agreement Enquiry Form and one of our team will call you back.

Other Services

We can also assist with employment law claims, oaths, affidavits and statutory declarations, wills and probate, lasting powers of attorneypersonal injury (accident claims)medical negligence claimscriminal injury compensation claims and professional negligence claims.

Why choose DSM Legal Solicitors?

We specialise in no win no fee agreements.

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All information contained within this website, including fact sheets or template letters, is provided for general information only and is not intended to constitute legal advice. You should contact a solicitor or other legal professional for advice relating to your specific circumstances if you have any questions about any legal matter. DSM Legal accepts no liability for any adverse consequences arising from reliance on this website for legal advice.

DSM Legal Solicitors is regulated by the Solicitors Regulation Authority – number 00346482