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How much compensation?

The payment made by the employer in settlement of the employee’s claims is referred to as a compensation payment, a severance payment or a termination payment.

The appropriate amount of compensation will relate to the merits of the employee’s legal claims and the damages that the courts may award if the employee is successful. Every situation is distinct. Legal advisers to both parties should identify the relevant legal claims and provide their client with guidance as to the appropriate amount of compensation.

The law also provides for confidentiality around settlement in non-dispute situations (in so far as this relates to unfair dismissal). The ACAS Code of Practice and accompanying Guidance identifies how these consensual arrangements can come about.

The offer of settlement made by the employer to the employee is recorded in the settlement agreement.

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Employee to take advice

There is a legal requirement that the employee receives advice from a relevant independent adviser, such as a solicitor.

The employee will want to understand the merits of their legal claims and the approximate value of the damages a court may award. With this information the employee can assess whether the compensation payment offered by the employer is worth accepting.

The independent adviser also needs to explain the terms in the settlement agreement.

If the employee decides to accept the settlement offer, then the adviser will negotiate with the employer to get the best deal.

Consult the rest of our guide for information on what a settlement agreement is and how much compensation.

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When are they used? What is in them? Use our guide to understand more about settlement agreements

Depends on a variety of factors. We will advise about the particulars of your situation and explain how much compensation is appropriate

Is a settlement agreement offered when employees are redundant? Find out more on our redundancy pages

We seek to address your legal needs in a way that suits you. For certain matters we can offer a fixed fee arrangement. Learn more about costs with Aeon settlements

Discover more about the terms that the employer will include in the settlement agreement.

  • “ Thank you for everything: your professionalism, responsiveness and wise counsel. You were simply brilliant! “
  • “ Have just collected the signed papers - thank you again for your excellent service and support. “
  • “ I know I’ve said it already but many thanks for all your work, help and support with the offer! If any of my friends or colleagues ever have to go through this I will make sure Irecommend you to them. You’ve been amazing! “
  • “ Your help and advice much appreciated, and for being so approachable. “
  • “ Thank you so much for all your help with my settlement and for the support over the past couple of weeks – I couldn’t have done it without you “
  • “ Thank you for everything you did to get my settlement agreement done and dusted. Your advice made what could have been a very stressful time much more manageable “
  • “ Many thanks for your help with my redundancy settlement. My colleagues have spoken highly of you as well. “
  • “ Thank you so much for your help during a stressful time – it’s not easy dealing with a former company but you were very supportive and helped at each step of the process. “

Visit the Aeon Solicitors main site, where you will find our law library, with information on a diverse range of employment law and commercial law issues, spanning contracts, post-termination restrictions, disciplinary and grievance, unfair dismissal and wrongful dismissal.

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