Settlement offer letter template
A settlement offer letter opens settlement discussions with an employee, proposing that their employment ends on agreed terms. It says why the employer is making the proposal, what it is offering, how long the offer stays open, and that the discussion is protected under section 111A of the Employment Rights Act 1996. It is sent before a formal settlement agreement is drawn up.
Adapted from Acas (19 August 2026). Contains public sector information licensed under the Open Government Licence v3.0.
What changes each time
14 values. Everything else is your wording, kept exactly.
The employee and the concerns
- Employee name
- Type of concern
- Concerns and action taken so far
- Procedure that would come next
- Where the procedure can be read
The terms offered
- Proposed employment end date
- Payment for or in lieu of wages and holiday
- Lump sum payment
- Claims to be settled
Other terms and the deadline
- Agreed reference offered
- Meeting offered
- Right to be accompanied
- Offer open until
- Letter signed by
The rules it usually needs
Written in plain English when the template is set up.
- Only when…
“The employment end date paragraph appears only when a proposed end date is given.”
An end date of 30 November 2026 was given, so the paragraph is in.
- Only when…
“The payments paragraph appears only when a payment is being offered.”
Both a payment in lieu of wages and a lump sum were agreed, so both bullets are in.
- Only when…
“The waiver of claims paragraph appears only when specific tribunal claims are named.”
Unfair dismissal was named, so the paragraph is in.
- Only when…
“The agreed reference sentence appears only when an agreed reference is offered.”
The draft terms offered one, so the sentence is in.
- Only when…
“The meeting and right-to-be-accompanied paragraph appears only when a meeting is offered.”
The manager offered to meet, so it is in, with the right to bring a colleague or union representative.
One worked example, start to finish
The settlement offer letter in DocuWeave, from upload to approval.
1The document uploaded
The Acas letter opening settlement discussions after a performance or disciplinary process, a Word file, uploaded as it is.
- 2
The template it became
It found 17 sections and 17 values, and asked 9 questions before publishing. Each term of the offer appears only when it is being offered.
3The paperwork dropped in
The manager's email, the draft terms sheet, a note of the meeting slot and a typed note.
4What was found, with sources
17 of 17 values filled from the paperwork, each with the passage it came from.
5What it asked
6 things for a person: three values the template says are always checked, and three where the files disagreed.
6The approved output
Approved, with Word and PDF downloads of exactly what was approved.
A free settlement offer letter to download
- Settlement offer letter, filled with fictional details (Word)
- Settlement offer letter, filled with fictional details (PDF)
Use it as it is, or upload it to DocuWeave and make it a template.
DocuWeave is not a law firm. A general template for common situations in England and Wales. It is not tailored to you and we do not update it when the law changes, so check it suits your situation before you use it. Terms.
Adapted from Acas (19 August 2026). Contains public sector information licensed under the Open Government Licence v3.0.
Questions people ask
What is a settlement offer letter?
A letter in which an employer proposes ending employment on agreed terms, usually a payment and an agreed reference, in return for the employee giving up the right to bring certain claims. It starts the discussion; the formal settlement agreement follows if the employee accepts.
What does section 111A of the Employment Rights Act 1996 do?
It makes an offer to settle, and discussions about it, inadmissible as evidence in an ordinary unfair dismissal claim, as long as the conversation is genuinely about settling. It does not protect improper behaviour or other kinds of claim.
Does the employee have to accept?
No. The letter should make clear there is no obligation to discuss the proposal, and that a refusal will not affect any procedure that follows.
How long should an employee be given to consider an offer?
Long enough to be reasonable in the circumstances. The Acas Code of Practice on settlement agreements suggests at least 10 calendar days, unless both sides agree otherwise.
Can I use my own settlement offer letter instead of this one?
Yes. Upload your own Word or PDF version and DocuWeave turns it into a template in your wording, with the same kind of rules and the same filling from paperwork.
Use this template
It opens in DocuWeave as a template you can check, change and publish. Nothing is used until you do.