Settlement agreements: 6 key tips | Blog | Paul Doran Law

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Settlement agreements: 6 key tips

Here are six key things to consider when negotiating a settlement agreement.

(In Northern Ireland, settlement agreements are still known as compromise agreements.)

We hope you find this advice useful, and of course are here to help if you have any further questions.

1. Take your time

When your employer offers you a settlement agreement, don’t accept or reject it straight away. Instead, ask for time to think about it.

A minimum of ten days is a reasonable amount of time to prepare your response – this is in line with the Acas Code of Practice, so your employer is likely to accept the delay.

Use this time to work out your best-case scenario and the minimum you would settle for. Also consider the five points below.

2. Put yourself in your employer’s shoes

You’ll be in a stronger position to negotiate when you think about things from your employer’s point of view.

Think of all the reasons why they should pay the amount you’re asking for.

For example, you might offer:

3. Keep emotion out of it

Losing your job can be stressful. You don’t know when you might find another job. You’re worried about how to pay your bills and support your family in the meantime. You might even be embarrassed – although there is no shame in it.

However, if you let emotion get the better of you, you are less likely to win in negotiations with your employer.

You have to stick to the facts, and keep emotion out of it. That’s just one reason why involving a specialist advisor at the early stages can be such a great support. What’s more, they won’t let your employer – or their lawyers – bully you into accepting less than you deserve. 

4. Go for goodwill

An employment tribunal might not take the following factors into account, but you may be able to negotiate direct with your employer on grounds such as:

This approach is most likely to work if you’re being made redundant, especially it’s from a small family firm with a friendly feel.

Even if you’re negotiating these aspects personally, having a specialist legal advisor (like us) in the background can be a great support.

5. Take specialist advice

By law, you have to get independent legal advice when you sign your settlement agreement – but it’s wise to talk to a specialist before you reach this stage, as they (we!) might be able to help you improve your employer’s offer.

For example, we can advise on:

6. Remember, it’s not just about the money

Of course you want to know how much money you’ll receive. But there are other considerations too. These aspects might mean a lot to you, but not cost your employer a penny.

For example, you can negotiate:

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