This FAQ document provides some useful information about settlement agreements, explains more about the advice process, considers some common queries and provides further information about our charging structure.

What is a settlement agreement?

A settlement agreement is a legally binding document which is often used to resolve any potential or actual employment law claims, and to bring an employment relationship to an end.

The agreement will set out the terms on which your employment is being terminated and commonly include clauses relating to payments, payment terms, claims being settled, taxation, return of company property and confidentiality.

How long do I have to consider a settlement agreement?

ACAS recommends a minimum of 10 calendar days to consider the offer, although this is not a statutory requirement. The deadline for signing a settlement agreement is often dictated by the proposed last day of your employment, as it should ideally be entered into before then. Your employer should allow you a reasonable amount of time – pressuring you to sign quickly could be seen as improper conduct.

What happens if I don’t want to sign a settlement agreement?

It is your decision as to whether you accept your employer’s settlement offer or not. If you do not want to accept it, your employment will continue as normal and your employer will likely proceed with the process they would have avoided by you signing a settlement agreement, for example a redundancy, disciplinary or performance process.

Do I have to sign my agreement twice?

Some agreements will require you to sign the agreement for a second time; this is called a reaffirmation.

These types of agreement are often used where there is a gap between the point you enter into the settlement agreement and the last day of your employment. It is the way your employer gets confirmation that you still agree to the terms of the original agreement and that no new claims have arisen.

Do I have to obtain legal advice on my settlement agreement?

Yes. You must seek legal advice on the terms and effect of the settlement agreement before entering into it so you understand what you are agreeing to. Evidence to your employer of obtaining legal advice is via a legal adviser’s certificate the form of which, is usually included as a schedule within the agreement itself.

If your agreement contains a reaffirmation requirement you will not only need to have an initial advice meeting, but a second shorter meeting at a later date as well, usually on or after the last day of your employment, to confirm the terms of the agreement again.

Our advice meetings are normally carried out via Teams or over the telephone, but they can be face to face if you would prefer.

How do I know if the financial elements of my agreement are reasonable?

Firstly, you should always check that your agreement set outs what you believe to be all of your contractual entitlements for example, normal salary up to and including the last day of your employment, holiday pay for any accrued but unused holiday and a payment in lieu of notice (if you are not being given the opportunity to work your notice period).

Settlement agreements will also often, but not always depending on the circumstances, contain an additional payment as compensation for the loss of employment. This acts as the additional incentive for you to accept the deal. However, we cannot tell you whether this amount is fair or not as it is very subjective for each person. Our job is to help you understand what you are agreeing to receive and what you are giving up, and it is then for you to decide if you feel the settlement amount offered is reasonable.

However, if you would like further advice to help you make that decision, such as what you could be awarded if you were to bring a successful employment tribunal claim for example, we can of course assist.

Who pays for the legal advice?

In the vast majority of cases an employer will contribute towards your legal fees. The amount of the contribution can vary depending on the circumstances and complexity of the settlement agreement.

The contribution for a basic settlement agreement that only requires one advice meeting is typically £500 plus VAT. If the agreement has a reaffirmation requirement it is usually £750 plus VAT, which is often split into two payments, the first of £500 plus VAT and the second of £250 plus VAT.

At Brachers we charge a minimum fee of £500 plus VAT to provide advice on a basic form agreement, and £750 plus VAT for those with a reaffirmation.

More complex agreements, usually those for senior employees that contain further obligations and therefore take longer to review and advise upon, will be priced on a case-by-case basis, and we will confirm the estimated cost to you following receipt of your agreement.

What is covered by Brachers’ minimum fee?

For a basic settlement agreement

The work included within our minimum £500 plus VAT charge is limited to 1.5 hours in total and we hope to be able to cover the following within the 1.5 hours:

a)    all necessary client onboarding, ID checks and risk assessments;

b)    review of the settlement agreement ahead of your advice meeting;

c)     having the advice meeting to explain the terms and effect of the agreement; and

d)    signing off on the adviser’s certificate at the end of the meeting before issuing your signed agreement and our adviser’s certificate to your employer.

For a settlement agreement and a reaffirmation

The work included within our minimum £750 plus VAT charge is limited to 2.5 hours in total and we hope to be able to cover all the above within the 2.5 hours, as well as:

a)    review of the reaffirmation wording ahead of your advice meeting;

b)    having the reaffirmation advice meeting with you to explain the terms and effect; and

c)     signing off on the second adviser’s certificate at the end of the reaffirmation meeting before issuing your signed reaffirmation and our second adviser’s certificate to your employer.

When might I have to pay extra?

Additional fees may be incurred for example where we have undertaken work that is not covered in the above scope and/or where the work has exceeded the 1.5 hour cap (or 2.5 hour cap for agreements with a reaffirmation requirement)

Work outside of scope or over the time cap is charged on a time spent basis* at our hourly rates, which are as follows:

Partners: £400 plus VAT

Senior Associates: £330 plus VAT

Solicitors: £250 – £300 plus VAT.

*Please note that our time is recorded in 6-minute units, which means 1 hour of our time is made up of 10 units in total.

Examples of when additional charges may be incurred include, but are not limited to the following:

a)    any correspondence with your employer, other than just the returning of your signed agreement and our signed adviser’s certificate;

b)    advice on any queries that are raised and responded to outside of the advice meeting and/or fall outside of the time cap;

c)     the agreement being amended before you are prepared to sign it;

d)    any wider advice other than the strict terms and effect of the agreement for example, advice in relation to post termination restrictions;

e)    having to deal with fundamental errors in the agreement ahead of the advice meeting; and

f)      any time spent over the 1.5 hour cap (or 2.5 hour cap for agreements with a reaffirmation requirement).

We always endeavour to keep the work within the 1.5 hour cap (or 2.5 hour cap for agreements with a reaffirmation requirement) and will charge your employer up to the maximum amount they have agreed to contribute. Your employer will be invoiced directly by Brachers for their contribution.

Can I ask my employer for a higher legal fees’ contribution?

Yes. If the legal fees contribution from your employer does not cover our minimum fee, you may wish to speak with your employer before seeking legal advice to explore whether they would be prepared to increase their contribution.

You can also try to negotiate a higher contribution from your employer if work has/will be carried out which is not covered by our minimum fee.

What do I do if I want to negotiate my agreement?

We appreciate that it is often only until after you have had legal advice that you can then decide whether you are happy with the agreement as drafted but if you wish to avoid additional legal fees, it is always best to only seek legal advice at a point where you feel comfortable with the agreement.

We will advise you on any potential risks with the agreement, which may or may not be a concern for you and/or an issue in reality, so you can then decide whether the benefit of trying to negotiate the agreement is worth the additional legal fees that are likely to be incurred, remembering that you could also seek to negotiate a higher legal fees contribution from your employer.

What happens after I’ve had my advice meeting?

After you have had your advice meeting, we will ask if you are happy to proceed on the basis of the agreement that we have advised upon. If you are, we will explain the ways you can go about signing your agreement, but please do check with your employer if they plan to use an electronic signature platform, such as DocuSign.

We can also sign off on the adviser’s certificate using electronic signature platforms but if your employer requires the certificate of be on Brachers’ headed paper, we will email the certificate to your employer separately.