Yes — a settlement agreement can be entered into while you are still employed, and this is very common. Your employment will then usually end on a termination date set out in the agreement.
How does this work if I am still employed?
Settlement agreements are often offered while you are still employed, for example during a redundancy process, a disciplinary or performance process, or after a dispute or breakdown in the working relationship. Your employer may offer one to bring your employment to an end on agreed terms.
In that situation, the agreement will usually set out your termination date, what you will be paid up to that date and any additional payment, such as a termination payment. You may keep working until the termination date, or your employer may ask you to stay away from work, for example on garden leave. You will also need to receive independent legal advice before you sign, as the agreement is unlikely to be valid without it. Our glossary of settlement agreement terms explains these in plain English.
Worth checking
Before you sign, check your termination date, what you will be paid until then, and whether you are expected to keep working or to stay away.
Does signing mean my employment has to end?
Not necessarily, but most settlement agreements are used to end employment, so it is important to check exactly what yours says. Some are used to resolve a specific issue, such as a grievance, while your employment continues.
Either way, you should be given a reasonable time to consider the offer and take advice before you decide.
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Get in touch →This article provides a high-level overview for general information purposes only and does not constitute legal advice. It should not be relied upon as a substitute for specific legal advice tailored to your individual circumstances.
Should you choose to formally instruct us, legal services will be provided by Nexa Law Limited. Employment Settlement Solicitor is a trading name of RJB Legal Services Ltd, a limited company registered in England and Wales with number 17353836. RJB Legal Services Ltd does not provide legal advice. RJB Legal Services is a consultant practice of Nexa Law Limited, a limited company registered in England and Wales with number 10209198, which is authorised and regulated by the Solicitors Regulation Authority under SRA number 633024.