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We’re Darwin Gray, one of Wales’ leading employment law firms and specialist settlement agreement solicitors for both employees and employers. We advise on hundreds of settlement agreements every year, across every industry and at every level. We’ll tell you honestly whether the deal on the table is fair, negotiate better terms where we can, and make sure the agreement is legally sound before you sign anything.
To speak to an employment law consultant today, call us on 02920 829 100 or use our Contact us form.
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A settlement agreement (previously called a compromise agreement) is a legally binding contract between an employer and employee. In it, the employee agrees to waive their right to bring legal claims, employment tribunal or court claims against the employer, usually in return for a financial settlement, payment and other agreed terms. In effect, a settlement agreement subjects an individual to a clean-break scenario where they can’t bring any claims against the employer.
For a settlement agreement to be legally valid under Section 203 of the Employment Rights Act 1996, it must:
That last point is critical. The employee must seek legal advice and receive independent legal advice before signing. Without it, the agreement isn’t legally binding. It’s also why employers typically agree to pay a contribution towards the employee’s legal costs.
Settlement agreements are used in a wide range of situations: redundancy exits, performance disputes, disciplinary situations, discrimination concerns, senior executive departures, workplace relationship breakdowns, and commercial negotiations. They’re often the quickest, most cost-effective way to resolve an employment situation for both sides.
Settlement agreements are one of the most useful tools in employment law for businesses. Used correctly, they let you exit an employee cleanly, avoid ongoing employment disputes, and remove the risk of future claims. Used incorrectly, they leave you exposed.
We draft, review, and advise on settlement agreements for businesses of all sizes, from small owner-managed businesses exiting a single employee through to large employers managing collective redundancy programmes.
Drafting watertight agreements: A poorly drafted settlement agreement is worse than useless. If it doesn’t correctly identify and waive the specific claims you’re worried about, the employee can still sue. We draft thorough, precise agreements that do the job properly.
Strategy advice before you offer: Before you approach an employee with a settlement offer, you need to think carefully. Is the without prejudice conversation genuinely protected? Is your offer pitched at the right level to be taken seriously? Are there claims you’re not accounting for? We advise before you make the approach, not just after.
Assessing the right level of offer: Getting the financial offer right matters. Too low and employees reject it or seek expert legal advice that uncovers claims worth more. Too high and you’re overpaying unnecessarily. We advise on what’s commercially sensible given the legal position and the circumstances.
Restrictive covenant drafting: Settlement agreements are often the right time to review, tighten, or extend post-termination restrictions. Garden leave provisions, non-competition clauses, non-solicitation of clients and staff. We make sure restrictions are proportionate and enforceable.
Confidentiality and reputation protection: If there are sensitive matters involved (performance issues, complaints, financial information, client relationships), confidentiality clauses need careful drafting. We protect your business interests without creating unenforceable provisions.
Large-scale and collective programmes: Managing redundancy programmes with multiple employees? We advise on collective consultation requirements, structure your settlement process, coordinate with employees’ solicitors, and make sure each agreement is valid. Efficient process, commercially sensible costs.
TUPE and business sales: Settlement agreements often arise in TUPE transfers and business acquisitions. We advise on when agreements are appropriate, what claims can be waived, and how to structure exits cleanly alongside a transaction.
Settlement agreements are a specialist area. They sit at the intersection of employment rights, tax law, contractual obligations, and negotiation strategy. We’re specialist employment law solicitors who advise on settlement agreements daily. You get real expertise, not a generalist who does settlements occasionally.
Many settlement agreement solicitors simply review the document, certify the advice, and let you sign. We go further. We assess whether the deal is genuinely fair, tell you honestly if it isn’t, and negotiate on your behalf when there’s room to do so. Employees regularly leave with significantly better packages after we get involved.
Settlement agreement deadlines are often tight. We respond quickly, sometimes same day for urgent situations. You won’t be left waiting days for an appointment while your deadline ticks closer. Call us, explain the urgency, and we’ll move fast.
You’ll speak directly to the specialist solicitor handling your matter. Not a trainee, not a paralegal, not a call centre. Direct access to the qualified employment solicitor who’s read your agreement, assessed your position, and knows your case.
We’re Wales’ leading commercial law firm offering a Welsh language employment law services at every level. If you want to discuss your settlement agreement in Welsh, receive advice in Welsh, or have documents reviewed with Welsh language consideration, we’re the only firm in Wales that can provide that seamlessly.
We advise employees and employers, which means we understand both perspectives. When we’re advising an employee, we know exactly what employers are trying to protect and where they have flexibility. When we’re advising an employer, we know exactly what experienced employee solicitors will challenge. That dual perspective makes us better advisers.
Our settlement agreement solicitors advise employees and employers across Wales and the whole of the UK. Cardiff, Bangor, Swansea, and beyond. If you need settlement agreement solicitors near me, we’re here, and we work remotely too so wherever you are, we can help.
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Call us or complete our online form. Tell us briefly what’s happening: you’ve been offered a settlement agreement, you’re an employer who needs one drafted, you want legal advice before signing. We’ll arrange a call, usually same day or next morning.
Email us your settlement agreement and any relevant correspondence. We read everything carefully before we speak to you: the draft agreement, any without prejudice correspondence, your contract of employment, and anything else relevant to your situation.
We walk through the agreement with you, explain every clause in plain English, tell you what rights you’re being asked to waive, assess whether the offer is fair given your position, flag any concerns, and explain your options clearly. Employees: we tell you whether to accept, negotiate, or reject. Employers: we advise on what to change before the agreement goes out.
If the terms aren’t right, we negotiate. For employees, that typically means going back to the employer’s solicitors to push for higher compensation, better reference wording, removal of unfair restrictions, or clarification of tax treatment. For employers, it means refining the agreement to address employee concerns without giving away more than necessary.
Once terms are agreed, we certify the advice (a legal requirement) and the agreement is executed. We handle all the paperwork. For employees, we make sure your employer pays the agreed contribution towards our costs. For employers, we make sure the agreement is correctly signed and enforceable.
Typical timescale: Initial advice (1-2 days) | Negotiation (3-7 days) | Final signing (1-2 days) | Total (5-14 days typically, faster when urgent)
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A Settlement Agreement is a written contract between an employer and an employee. It will usually involve the employee receiving a payment from the employer in exchange for settling all actual and potential claims against the employer.
Settlement Agreements are most commonly used to bring an employee’s employment to an end on an agreed basis. However, they can also be used to settle workplace disputes. Settlement Agreements can therefore offer both employer and employee a clean break. They can also be used to avoid the cost and time of handling any workplace disputes and any potential employment tribunal claims arising from them.
Usually, an employer will be the one to offer a Settlement Agreement. However, there are circumstances where an employee can approach their employer to suggest one, for example, if they’re experiencing issues in the workplace and are threatening to bring claims against their employer.
These discussions about offering a Settlement Agreement should be made on a “without prejudice” basis (meaning off the record) or as part of a “protected conversation” (again meaning off the record). This will mean that the Settlement Agreement can’t be mentioned as part of any court or tribunal claims or hearings.
Although all circumstances are different, some of the payments commonly made under a Settlement Agreement are:
These are some of the important clauses to include:
An employee should be given a reasonable amount of time to consider the terms of a Settlement Agreement, and this will vary from case to case. However, the guidance says that employees should be given at least 10 calendar days to consider a Settlement Agreement.
Potentially yes. In addition to receiving financial compensation, an employee might request other terms that would benefit them, such as an agreed reference or an agreed leaving announcement.
Yes, in order for a Settlement Agreement to become effective, an employee must receive independent legal advice on it. This ensures that the employee understands the Settlement Agreement and its effect on their ability to bring future claims against the employer.
It is common, and expected in most cases, that the employer will pay a contribution towards the employee’s costs in getting advice on the Settlement Agreement from a solicitor. This contribution will often range from £350+VAT up to £1,500+VAT, depending on how complicated the Settlement Agreement is.
Most Settlement Agreements will contain confidentiality clauses, meaning that the settlement or what has been agreed in the Settlement Agreement can’t be shared with anyone other than the employer and the employee. It’s common for the Settlement Agreement to include some exceptions to this rule however, for example, to allow both parties to tell their solicitors and accountants, and to allow the employee to tell their spouse, partner or close family.
We have offices in Cardiff and Bangor, with employment lawyers advising individuals and businesses across Wales and the UK. Most settlement agreement advice is handled remotely (video call or telephone) so wherever you are, we can help quickly.
Cardiff office: Serving South Wales including Swansea, Newport, Bridgend, Merthyr Tydfil, the Vale of Glamorgan, and beyond.
Bangor office: Serving North Wales including Wrexham, Anglesey, Flintshire, and the wider North Wales region.
For clients searching for settlement agreement solicitors near me anywhere in Wales, we’re the clear choice. We’re Wales’ leading Welsh language commercial law firm, the only firm offering full bilingual employment law services at every level.
We also advise clients across England, Scotland, and Northern Ireland. Settlement agreement work is well-suited to remote delivery, and our expertise speaks for itself regardless of geography.
Whether you’ve just been handed a settlement agreement, or you’re an employer needing expert help to exit an employee cleanly, we’re ready to help. Quick, specialist, and direct.
For employees: we’ll tell you honestly if the offer is fair, negotiate better terms where we can, and make sure you understand exactly what you’re signing. Our advice is covered by your employer’s legal fees contribution in most cases.
For employers: we draft legally sound, commercially balanced agreements that protect your business and bring certainty. Fast turnaround, fixed fees wherever possible.
If you need any advice on Settlement Agreements, please contact a member of our employment law team in confidence here or on 02920 829 100 for a free initial call to see how they can help.
To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.
02920 829 100 
