Fiducia TogetherSettlement agreement
A contract ending employment and waiving claims. Requires independent legal advice to be binding.
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.
What it means
A settlement agreement is a legally binding contract in which an employee waives specified employment claims, usually in return for a payment.
Why it matters
It is the standard way to end an employment relationship cleanly. It is only binding if statutory conditions are met, including that the employee received independent legal advice from a qualified adviser who is named in it.
What it looks like in practice
Employers normally contribute to the employee's legal fees. Some termination payments are tax-free up to a threshold; anything contractual, including notice pay, is taxable.
What to watch out for
Presenting one as a fait accompli with a same-day deadline. ACAS guidance suggests a reasonable period to consider it, and pressure undermines the agreement and can itself become a claim.
Where to get proper advice
An employment solicitor on both sides — it is a requirement, not a courtesy. ACAS for the process.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.