At K J Smith Solicitors we can assist and advise you on Settlement Agreements (formerly known as Compromise Agreements).
A Settlement Agreement is a legally binding agreement following the termination of your employment. It usually provides for a severance payment by your employer, in return for which you agree not to pursue any claim you may have against your employer.
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Quite often, the settlement agreement will also deal with the notice element in your contract of employment and may provide for a payment in lieu.
Please note that a Settlement Agreement is the same as a Compromise Agreement, as it was renamed to Settlement Agreement in July of 2013. For all intents and purposes, they are the same and continue to have the same legal effect.
Employers are now increasingly using Settlement Agreements as a mechanism for preventing possible future complaints to a tribunal, especially in redundancy situations. It also reassures employee’s, as their employer is then legally obligated to pay the settlement sum that has been offered.
An independent solicitor must advise the employee as to the terms of the agreement and implications of it before it is executed by the employee.
Once you have signed a settlement agreement, you have agreed to give up any claim that you might have had against an employer, as a result of the termination of your employment. Before the settlement agreement can take effect, your employer should request that you seek independent legal advice to discuss the terms of the settlement agreement.
If you’re concerned about paying tax on the money you can receive, you will only be taxed on any sums that are owed to you as per your employment contract; for example, wages, any holiday pay and additional commission will all be treated as they would normally. However any payment for redundancy, compensation for loss of earnings or any claims of discrimination will be exempt from tax for sums up to £30,000.
When it comes to instructing a solicitor against your employer, cost can be a worrying factor, however it is common that your employer will have agreed within the settlement agreement to contribute a sum towards your legal fees, up to a certain amount. This contribution from your employer is usually enough to ensure that you aren't required to contribute to your legal fees yourself, if you are satisfied with the amount offered by your settlement agreement. If you want to contest the amount offered and require a solicitor to negotiate a better settlement, then there may be additional costs for the extra work required.
Please contact K J Smith Solicitors today on 01491 630000 (Henley on Thames), 020 7070 0330 (London), 0118 418 1000 (Reading), 01753 325000 (Windsor), 01256 584000 (Basingstoke), 01483 370100 (Guildford) or 01494 629000 (Beaconsfield) or e mail email@example.com.
We offer an initial no obligation telephone appointment to give you the opportunity to talk to us and find out more before deciding if you wish to proceed in instructing us to act on your behalf.
You can contact the firm though any one of our offices in Henley-on-Thames, London, Reading, Windsor, Basingstoke, Guildford, Beaconsfield and Abingdon.