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a settlement agreement is a legally binding contract made between an employee and an employer you might also hear these agreements being referred to as compromise agreements a settlement agreement effectively provides a clean break between the employee and the employer with both parties having agreed the terms of departure and the compensation or settlement payment you will need to obtain independent legal advice from a solicitor before you sign a settlement agreement the role of the employment solicitor is to talk you through the legal jargon in the agreement make sure that you understand and are happy with what you are signing and to discuss with you your options including negotiating a better deal more often than not settlement agreements are used to record the agreed terms surrounding the termination of an individuals employment but not always sometimes they can be used to settle a dispute that has arisen where the employee will remain employed you may be offered a settlement agre
