Settlement agreement checklist

Employers must be very careful when talking to employees about Settlement Agreements or departure from a job, as in doing so they risk constructive dismissal claims. In particular:

• all written communications about Settlement Agreements or agreed departure terms should be marked ‘Without Prejudice’ and/or ‘Subject to Contract’

• the employer and employee should agree that all verbal discussions are to be without prejudice

Doing this should usually mean that these negotiations and communications are not admissible as evidence in court - but this will not always be the case. For more information, read Settlement agreements with employees.

Read the document to make sure it meets your needs and that you’ve provided all of the necessary information about the employment relationship and the claims to be settled. Remember that, if you have any questions, you can Ask a lawyer for advice.

An employee must receive independent advice before signing a Settlement Agreement in order for the Agreement to be legally binding. Advice must be given by a specified advisor, for example, a solicitor. You can use our Settlement Agreement legal advice service. 

This Settlement Agreement template assumes that a solicitor is used. If another professional is used instead (eg certain qualified trade union or advice centres employees), you can Ask a lawyer for help altering your Settlement Agreement to reflect this).

Each party to the Settlement Agreement must sign the Agreement. The Solicitor’s Certificate contained in the Agreement (ie Schedule 2) must also be signed by the employee’s legal advisor (ie their solicitor).

If the employer is a company or an LLP, its representative (ie signatory) must sign.

You can sign your Settlement Agreement by either:

• signing online using RocketSign, or 

• signing in print. Print a copy of the Agreement for both parties. Both parties should sign and date each copy

Each party should keep their own original signed Agreement. If you signed online, you should download and securely store a copy of your Settlement Agreement for your records and ensure the other party does so too.

A copy of your Settlement Agreement will also be stored automatically in your Rocket Lawyer account ‘Dashboard’.