Negotiating a Settlement Agreement

If you have been offered a settlement agreement, you may be wondering whether the terms are negotiable and whether it is worth asking for more. In many cases, settlement agreements are negotiable and it is often possible to improve the terms with the right approach.

Can settlement agreements be negotiated?

Yes. Settlement agreements are usually presented as a starting point rather than a final offer. Employers often expect some level of discussion, particularly where the agreement relates to redundancy, workplace disputes, or the resolution of potential employment claims.

Whether negotiation is appropriate depends on your individual circumstances, the claims you may have, and the employer’s objectives.

What parts of a settlement agreement can be negotiated?

Negotiations may cover a wide range of issues, including:

• The level of compensation or termination payment
• The tax treatment of payments
• Notice pay and benefits
• Restrictive covenants and post-termination restrictions
• The wording of references
• Confidentiality and non-disparagement clauses
• The employer’s contribution towards legal fees

How does settlement agreement negotiation usually work?

In most cases, negotiations are conducted between solicitors rather than directly between the employee and employer. This allows discussions to remain professional and focused, while reducing the risk of damaging ongoing workplace relationships.

Your solicitor will assess the agreement, advise you on its strengths and weaknesses, and identify where improvements may realistically be achieved before approaching the employer or their advisers.

When is the best time to negotiate a settlement agreement?

The best time to negotiate is usually before the agreement is signed. Employers are often most open to negotiation at the point the settlement agreement is first offered, particularly if they wish to resolve matters quickly and avoid further disputes.

Deadlines are common, but these can often be extended to allow proper consideration and discussion.

What are the risks of negotiating a settlement agreement?

Negotiation does carry some risks. In rare cases, an employer may withdraw an offer if negotiations are unrealistic or handled poorly. This is why it is important to take advice before engaging in negotiations, so that any discussions are proportionate and well-judged.

A solicitor can help you balance the potential benefits of negotiation against the risks involved.

Should I negotiate a settlement agreement myself?

While it is possible to raise questions directly with your employer, many employees prefer to instruct a solicitor to negotiate on their behalf. This helps ensure that negotiations are conducted professionally and that your legal position is protected.

For advice on negotiating a settlement agreement and understanding your options, speak to our settlement agreement solicitors. You may also find it helpful to read our guidance on what is a reasonable settlement agreement, which explains how settlement offers are assessed in practice.