Home Legal Services Employment Settlement Agreements for Employees
Written by:Â Owen John, Employment Law Partner, Darwin Gray | Last updated: 24/10/2026 | Reviewed by: Owen John
People always want a number, and it’s completely understandable. But the honest answer is that there’s no reliable “average”, and anyone who quotes you one is guessing. A settlement for a junior employee with a clean, fair redundancy looks nothing like one for a senior executive with a strong discrimination claim. The range is enormous, from a few thousand pounds to six figures, because the situations are so different.
What we can do is explain what actually drives the figure, so you can judge whether what you’ve been offered is fair, and whether there’s room to push. That’s far more useful than a made-up average.
A settlement offer is really made up of two parts: what you’re owed anyway, and compensation on top. The compensation part is where the negotiation happens, and it’s driven by:
As a baseline, a settlement should include everything you’re actually owed:
Then, on top of that, there should be a genuine ex gratia payment, the compensation for losing your job and waiving your claims. If an “offer” only covers what you were owed anyway, with little or nothing extra, it’s usually not a good deal, you’d be giving up your claims for nothing.
The real test isn’t “is this a big number?”, it’s “is this more than I’d likely get by not signing?”. To answer that, you need to know what your claims are worth and how likely they are to succeed. That’s hard to judge on your own, which is exactly why independent legal advice is both a legal requirement and genuinely useful.
When we review an offer, we assess your underlying position, what you’d realistically recover at a tribunal, weighed against the time, cost, and uncertainty of getting there, and compare it with what’s on the table. Sometimes the offer is genuinely fair and we’ll tell you to take it. Sometimes there’s clear room to improve it. Either way, you’ll know where you stand before you decide.
If there’s room to negotiate, we do. We regularly secure improved packages, more compensation, better reference wording, removal of unhelpful restrictions, payment of entitlements that were left out. Employers often have more flexibility than their opening offer suggests, especially where there are weaknesses in how they’ve handled things. Our guide to negotiating a settlement agreement explains how we approach it. You can also get a rough starting estimate from our settlement agreement calculator.
There isn’t a reliable average, and quoting one would be misleading. Settlements range from a few thousand pounds to six figures depending on your salary, length of service, and, most importantly, the strength of the claims you’d be giving up. A fair redundancy with a clean process settles very differently from a strong discrimination case. Rather than chasing an average, it’s far more useful to assess what your specific situation is worth, which is what we do when we review your offer.
It’s a mix of what you’re owed (notice, holiday, redundancy, earned bonus) plus compensation on top. The compensation part is driven mainly by the strength of any claims you’d be waiving, your length of service and salary, how long you might be out of work, and how keen the employer is to settle quickly. The stronger your position, the higher the figure tends to be. That’s why understanding your claims is the key to knowing what’s fair.
The test is whether the offer is better than what you’d realistically get by not signing and pursuing your claims instead. Answering that means assessing what your claims are worth and how likely they are to succeed, weighed against the time, cost, and stress of a tribunal. That’s difficult to judge alone, which is why independent advice helps. We’ll give you an honest view, including telling you if the offer is already good.
Yes, and you often should. An opening offer is rarely the employer’s final position, and they frequently have more room than it suggests, particularly if there are weaknesses in how they’ve treated you. We regularly negotiate better packages: more money, improved references, removal of restrictive covenants, or entitlements that were missed. The key is knowing your leverage before you respond, which is where taking advice early makes a real difference.
If you want an honest view of whether your offer is fair, and whether you can do better, we’ll give you one. We’re Darwin Gray, one of Wales’ leading employment law firms, advising on hundreds of settlement agreements a year, and in most cases your employer covers the cost of our advice. You’ll deal directly with your solicitor, and as the only firm in Wales offering full Welsh language employment advice at every level, we can help in Welsh or English.
Get a free, no obligation chat with our employment team. Call 02920 829 100 or use our contact form.
Settlement agreements for employees
Negotiating a settlement agreement
Settlement agreement calculator
Disclaimer: This guide is general information, not legal advice, and employment law changes. For advice on your situation, please speak to a qualified employment solicitor.
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