Can I ask my employer for a settlement agreement?

Yes, you can ask, but it usually weakens your bargaining position. You keep the most leverage when they propose settlement.

Settlement agreements are almost always offered by employers, not requested by employees. Technically either side can start the conversation, and Acas confirms this, but in practice raising it yourself often backfires. The moment you suggest it, you’re signalling that you’re ready to leave. That weakens your bargaining power, lowers the amount on the table, and can even prompt the employer to move you out faster.

Why it feels tempting (and why it often isn’t to your advantage)

You want closure and no tribunal fight

The problem is, once you say that out loud, the employer knows you won’t push and they’ll pay less.

You feel a performance, sickness, or redundancy process is inevitable

It might not be. Employers often get the process wrong by skipping steps, mishandling evidence, or failing to follow policy. Those mistakes can give you leverage if things progress, so don’t assume the outcome is fixed.

The relationship has broken down

If things are toxic, your employer already wants you gone. Pressure usually forces them to make the first move.

You want to control timing, references, or the exit narrative

Those things are often agreed once money is on the table anyway. Ask too soon and you risk trading away your strongest chip for something you could have had for free.

A quick reality check

It’s easy to say “let them make the first move” when you’re writing a guide about settlement agreements. In real life, though, the right move is often a subjective call. Not every decision is about maximising money or leverage. Sometimes people prioritise peace of mind, health, or dignity over pushing for the best financial outcome. That doesn’t make the choice wrong; it simply means their goals in that situation are different.

When it might still make sense

There are times when asking first is a practical choice:

• You’re certain you want out and value speed over money

• You’re stuck in a process that’s damaging your health and you want closure

• You want to avoid a drawn-out dispute or public fight at almost any cost

If those apply, asking can be sensible, but see it as cutting losses rather than maximising value.

How to raise it (if you decide you must)

If you do ask, make sure the discussion is genuinely off the record. There are two main legal routes.

Without prejudice

This applies only if there’s a genuine dispute and you’re making a real attempt to settle.

Protected conversation (section 111A, ERA 1996)

This allows off-the-record talks even where there’s no dispute, but protection is limited. It only protects ordinary unfair dismissal claims, not discrimination or whistleblowing.

A safe way to raise it might be to say:

“In light of recent events, I’d like to discuss, on a without prejudice basis, whether terms can be agreed for ending my employment. If without prejudice is not available, I suggest a protected conversation under section 111A ERA 1996.”

What to ask for if they agree to talk

Here are the key things to cover if they agree to negotiate terms:

• A fair ex gratia payment and clear payment timing

• Notice arrangements (worked notice or PILON), plus accrued holiday pay

• Bonus, commission, or LTIP treatment under scheme rules

• Pension contributions paid directly to your scheme where appropriate

• Agreed reference wording and announcement text

• A reasonable contribution to legal fees

• Clear tax drafting, including the £30,000 exemption and correct PENP treatment

• Practical terms such as return of property, confidentiality with carve-outs, and interest on late payment