If you have been offered a settlement agreement, gather the draft agreement, your employment contract, recent payslips and any letters or emails about your exit before you speak to an adviser, and make a note of the date by which your employer wants an answer. With those in hand, independent advice can focus on what matters: what you are being offered, what you are giving up and whether anything needs to change.
This article explains why independent advice is needed, what to prepare and what to expect. It applies to employees in England and Wales. Settlement agreements work the same way whether you live or work in St Albans, elsewhere in Hertfordshire or anywhere else in England and Wales.
Why independent advice is required
A settlement agreement is a legally binding contract. In return for a payment or other terms, you usually agree not to bring claims against your employer.
Many employment rights cannot normally be signed away. Section 203 of the Employment Rights Act 1996 allows them to be settled through a settlement agreement only if certain conditions are met. Among other things:
- the agreement must be in writing;
- you must have received advice from a relevant independent adviser on its terms and effect, including its effect on your ability to bring an employment tribunal claim;
- the adviser must be covered by insurance or professional indemnity;
- the agreement must identify the adviser; and
- the agreement must state that these conditions have been met.
A qualified lawyer, such as a solicitor, can be a relevant independent adviser. The adviser must not be acting for your employer.
Acas guidance also notes that the agreement should list the particular claims it covers, rather than relying only on a generic "full and final settlement" phrase.
Your timetable
The Acas Code of Practice on settlement agreements says that, unless the parties agree otherwise, a minimum of 10 calendar days should usually be allowed to consider the proposed written terms and take advice. Your employer may still give you a specific deadline. Tell your adviser about it at the start.
Separately, tribunal time limits keep running while you consider an offer. According to the government's published timeline, retrieved on 26 October 2026, the time limit for most employment tribunal claims increased from three months to six months on 1 October 2026. In most cases you must also contact Acas for early conciliation before bringing a claim. If you think you may have a claim, do not assume a settlement discussion pauses any deadline.
What to prepare: a checklist
The agreement itself
- The draft settlement agreement, in an editable or clear copy.
- Any covering letter or email from your employer.
- Any draft reference or announcement that is meant to be agreed.
Your employment terms
- Your contract of employment and any later variations.
- Any staff handbook or policies referred to in the agreement, such as bonus, commission, car or share schemes.
- Any documents containing restrictive covenants, such as non-compete or non-solicitation clauses.
Pay and benefits
- Your three most recent payslips.
- Details of any bonus, commission or overtime owed or expected.
- Your outstanding holiday entitlement.
- Details of benefits such as pension, health insurance or a company car.
- Information about any share options or equity, which may need separate advice.
Background to your exit
- Letters or emails about your exit or the reasons given for it.
- Any grievance you have raised, or disciplinary or performance process you have been through, with outcomes.
- A short timeline, in your own words, of the key events.
- Notes of any meeting at which the agreement was discussed.
Practical points
- Your preferred leaving date, if you have one.
- Whether you have another job lined up, which may affect restrictive covenants and timing.
- Your employer's stated contribution towards legal fees, if any.
What independent advice will cover
A proper review will usually go through:
- The payments. What you will receive, when, how it is described, and how the general tax position applies to the different elements.
- Notice and holiday. Whether notice pay and accrued holiday are being paid correctly.
- The claims you are waiving. What you are giving up and whether the list is appropriate.
- Warranties. Statements you are asked to confirm, for example that you are not aware of any claims or have not breached your contract.
- Confidentiality and non-disparagement. What you can and cannot say afterwards, and to whom.
- References. Whether an agreed reference is attached and on what terms.
- Restrictive covenants. Whether existing restrictions are being reaffirmed or extended.
- Return of property and any other practical obligations.
The adviser should explain the effect of the agreement on your ability to bring a tribunal claim. Whether to sign is your decision.
Who pays for the advice
Employers often offer a contribution towards your legal costs, and the agreement usually states the amount. A contribution is not a legal requirement and may not cover all the work, particularly if you want help negotiating. Ask your adviser before you start what their fee will be and what is included.
Advice is not the same as negotiation
A standard review is about understanding the agreement. If you want your adviser to negotiate better terms, that is usually additional work, and its value depends on the strength of any potential claims and your priorities. An employer is not obliged to improve its offer.
Protected conversations and "without prejudice"
Settlement discussions are often described as "without prejudice" or as "protected conversations". In broad terms, section 111A of the Employment Rights Act 1996 can prevent pre-termination negotiations being used as evidence in an ordinary unfair dismissal claim. The Acas Code explains that this protection does not extend to every type of claim, such as discrimination claims, and can be lost if there is improper behaviour. If you are unsure whether a conversation was protected, mention it to your adviser.
Changes on the horizon
The Employment Rights Act 2025 is being brought into force in stages. The government's timeline shows further changes scheduled from 1 January 2027, including to the unfair dismissal qualifying period. These dates may change, so ask your adviser how they might affect your position.
Scope of this article
This is general information about the law in England and Wales as at 26 October 2026. It is not legal advice on your situation. It does not cover settlements reached through Acas conciliation, which are recorded differently.
Next step
If you have been offered a settlement agreement, see my employment and settlement agreement service or send me your employer's name and your deadline by email to info@sadikbugra.com. Please do not send the agreement until I have confirmed there is no conflict. I do not provide a signature-only certificate, and an enquiry does not mean I am acting for you or monitoring any deadline.