Summary
If you’ve been offered a settlement agreement, you don’t have to accept the first version you receive. In many cases, there may be room to negotiate the financial package, your notice pay, references, confidentiality clauses, or even your leaving date.
Understanding the steps to negotiate a settlement agreement can help you make informed decisions and avoid signing an agreement that doesn’t reflect your interests.
Key Takeaways
- You do not have to accept the first offer.
- Read the agreement carefully before signing.
- Identify anything you want to change.
- Speak to an employment solicitor before responding.
- Your employer will usually contribute towards your legal fees.
- Don’t feel pressured by deadlines without getting advice first.
Steps to Negotiate a Settlement Agreement
1. Read the Agreement Carefully
Before making any decisions, take time to understand what the agreement says. Look at the financial offer, notice pay, holiday pay, restrictive covenants, confidentiality clauses and any other terms.
2. Decide What Matters Most
Think about what you would like to improve. This could include:
- A higher compensation payment
- An agreed employment reference
- A later leaving date
- Payment of bonuses or commission
- Changes to restrictive covenants
- Clarifying confidential terms
Not every point will be negotiable, but it’s important to know your priorities.
3. Get Independent Legal Advice
A settlement agreement is only legally binding if you receive independent legal advice.
A solicitor can explain what the agreement means, identify any risks, and advise whether the offer is reasonable based on your circumstances.
In many cases, your employer will pay a contribution towards your legal fees.
Click here to speak to our Employment Law Team.
4. Discuss Possible Changes
Once you’ve received advice, your solicitor can negotiate with your employer or their solicitor on your behalf.
This often results in amendments without the need for lengthy discussions or formal legal proceedings.
5. Review the Final Version Before Signing
Once any agreed changes have been made, read the final version carefully.
Only sign when you’re satisfied that you understand the terms and are happy with the outcome.
Frequently Asked Questions
Yes. Many settlement agreements can be negotiated before they are signed. This may include the financial package, reference, notice arrangements or other contractual terms.
Depending on your circumstances, you may be able to negotiate compensation, notice pay, bonuses, commission, holiday pay, an agreed reference or amendments to restrictive covenants.
Usually not. Many negotiations are resolved quickly, especially when both parties want to reach an agreement.
Yes. Independent legal advice is required before a settlement agreement becomes legally binding. A solicitor can also negotiate improved terms on your behalf.
In most cases, employers contribute towards the cost of independent legal advice for settlement agreements.
Not usually. Even if you’ve been given a deadline, it’s sensible to understand the agreement and obtain legal advice before signing.
Speak to GLP Solicitors
If you’ve been offered a settlement agreement, our Employment Law team can explain your options, review the agreement and negotiate on your behalf where appropriate.
We’ll provide clear, practical advice so you can make an informed decision with confidence.