Don't sign yet. The first offer is a first offer. Speak to Kestrel.
A settlement agreement is only binding once you have had independent legal advice on it, and the employer almost always pays a contribution for that advice. Everything in it is negotiable: the money, the reference, the leaving date, restrictive covenants. The first draft is written for the employer. Signing unread is the only real mistake.
The law only lets you waive employment claims in a settlement agreement after advice from an independent adviser, usually a solicitor the employer contributes towards. That requirement exists because you are giving up tribunal rights; the advice is your protection, not a formality.
Genuine compensation for loss of employment is commonly paid free of income tax up to £30,000, while notice pay and holiday pay are taxed as earnings. How the payment is structured matters, and the agreement's tax indemnity clause deserves attention before you rely on anyone's assurances.
Discussions about settlement are often protected: pre-termination negotiations and without prejudice conversations generally cannot be used in an ordinary unfair dismissal claim. That protection cuts both ways, and it has limits where discrimination or improper behaviour is in play.
Guide edition: August 2026. General information for England and Wales. Current law and your particular facts require assessment before action.
Take the document away. Deadlines in covering emails are usually pressure, not law, and a short extension to take advice is routinely given.
Notice, bonus, equity, holiday, and the realistic tribunal claims. The offer should be judged against that, not against your monthly salary alone.
Money, but also the agreed reference, announcement wording, leaving date, covenant relaxations and legal fee contribution. These often move further than the headline number.
Advice given, adjustments made, tax treatment understood. Then it binds both sides, and the reference clause becomes enforceable, which protects you.
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Speak to Kestrel nowOffers usually carry short response deadlines, and underlying tribunal claims keep their own three-month clocks running in the background. Take advice inside the deadline; do not let conciliation windows lapse while negotiating.
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No. You can negotiate, refuse, or keep your claims and go to the tribunal. The agreement is a trade: certainty and money now against the value and risk of those claims. Advice prices that trade.
Measured against notice owed, time to find equivalent work, and the strength of any claims, a fair figure emerges quickly. First drafts commonly sit below it, which is why negotiation is normal and expected.
Compensation for loss of office is commonly tax-free up to £30,000; notice and holiday pay are taxed as normal. The agreement should structure this correctly, and the advice covers it.
They can in theory, but a professional counter through a solicitor rarely triggers that; employers offer agreements because they want certainty. Brinkmanship is a tactic, not the norm.
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