How to Increase a Settlement Agreement Offer from Your Employer
How to Increase a Settlement Agreement Offer from Your Employer
Settlement agreements are often a welcome route for both employers and employees to bring a working relationship to a clean, legally-binding close. However, the first offer an employee receives is rarely the final word. With the right approach, and the right legal support, it is often possible to negotiate a higher settlement sum and more favourable terms.
In this article, we explain practical, effective ways to increase a settlement agreement offer from your employer, and how specialist solicitors can help secure the best possible outcome.
What Is a Settlement Agreement?
A settlement agreement (previously known as a compromise agreement) is a legally binding contract between an employer and employee. In exchange for waiving certain employment rights and potential claims, the employer will typically offer:
- a financial settlement;
- an agreed reference;
- confidentiality provisions; and
- other negotiated terms (e.g., garden leave, release of restrictive covenants).
Because employees must receive independent legal advice for the signed agreement to be valid, the negotiation stage is a crucial opportunity to improve the offer.
You can read a more in-depth explanation of settlement agreements in our separate article here.
How to Increase Your Employer’s Settlement Offer
- Understand Your Legal Leverage
Your bargaining power is closely tied to the strength of any potential claims you could bring in an Employment Tribunal, such as:
- Unfair dismissal;
- Discrimination;
- Whistleblowing; and/or
- Breach of contract.
If your employer is keen to avoid litigation risk, publicity, or internal disruption, they are more likely to increase their offer.
A solicitor can quickly assess the merits of potential claims and present these to the employer in a persuasive, professional way.
- Request Your Employer’s Evidence and Rationale
Employers should be prepared to justify their calculations. Asking for transparency around matters such as:
- Redundancy scoring;
- Disciplinary evidence;
- Performance data; and
- Selection criteria.
These factors may expose weaknesses in the employer’s position by highlighting inconsistencies or procedural failings. This, in turn, can often encourage employers to improve settlement terms to avoid future challenge.
- Quantify Your Losses Properly
Many employees accept offers without understanding what they are truly entitled to. A fair calculation may include, among other things, the following:
- Payment in lieu of notice (PILON);
- Holiday pay;
- Bonus or commission;
- Pension contributions;
- Share scheme entitlements; and
- Loss of earnings until you find new employment.
Your losses may be significantly greater than the initial offer suggests.
- Remain Professional, Firm and Informed
Approaching negotiations calmly and professionally often leads to better results. Employers are more willing to improve offers when they feel the process is constructive rather than confrontational.
Key strategies include:
- Focusing on facts, not emotions;
- Putting requests in writing;
- Asking sensible, justified questions; and
- Allowing your solicitor to lead discussions where helpful.
- Highlight Non-Financial Terms Too
Increasing the overall value of a settlement agreement is not just about securing a higher financial offer. You can also negotiate for, among other things, the following:
- A positive or bespoke reference;
- A later termination date (to extend continuous employment);
- Garden leave;
- Release or relaxation of restrictive covenants; and/or
- Contribution to legal fees.
These can be especially valuable when moving into a new role or industry.
- Engage a Solicitor to Negotiate on Your Behalf
Some employers may take negotiations more seriously when an experienced employment solicitor is involved. Professional representation can, among other things, assist with identifying claims you may not realise you have, challenge low or unfair offers and ensure that no contractual entitlements are missed.
The employer typically contributes towards your legal fees, meaning expert advice can often costs you little or nothing.
How Much Can You Increase a Settlement Agreement Offer By?
Every case is different, but it is common for settlement offers to increase significantly once negotiations begin and your legal position is properly explored.
Factors affecting the final settlement include:
- Strength of potential claims;
- Seniority and length of service;
- Expected future loss of earnings;
- Whether the employer followed a fair process; and
- The employer’s risk tolerance and appetite to avoid litigation.
When Should You Seek Legal Advice?
Early advice gives you the best chance of maximising your settlement agreement offer and avoiding missed opportunities.
At the Jonathan Lea Network, our employment law team regularly helps employees negotiate improved financial packages and more favourable terms. We offer clear, practical guidance and handle discussions professionally to reduce stress and deliver results.
If you have received a settlement agreement, or expect one soon, our team can help you:
- Understand your legal rights;
- Assess the fairness of the offer;
- Negotiate a higher settlement;
- Secure more favourable terms; and
- Ensure the agreement is enforceable and in your best interests.
To discuss your situation in confidence, please contact the Jonathan Lea Network. We will be happy to help you secure the best possible outcome. We usually offer a no-cost, no-obligation 20-minute introductory call as a starting point or, in some cases, if you would just like some initial advice and guidance, we will instead offer a one-hour fixed fee appointment (charged from £250 plus VAT to £350 plus VAT* depending on the complexity of the issues and seniority of the fee earner).
Please email wewillhelp@jonathanlea.net providing us with any relevant information ensuring that any call we have is as productive as possible or call us on 01444 708640. After this call, we can then email you a scope of work, fee estimate (or fixed fee quote if possible), and confirmation of any other points or information mentioned on the call.
VAT is charged at 20%.
This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited.