This very much depends on the content of your agreement as, with all legal documents, the devil is always in the detail.

Launched as a simplified version of the compromise agreement, settlement agreements essentially serve as a legally binding contract between you and your employer whereby you agree that you will not pursue any of the specified claims in the agreement.  Care needs to be taken by both the employer and the employee to specify the particular claims that are covered by the agreement.  Once you have signed the agreement and obtained independent advice on its terms, you will be prevented from bringing any of the claims set out in the agreement.  You will not usually be prevented from taking proceedings to enforce the terms of the agreement.

Settlement agreements will often have clauses to cover most types of claim which an employee could bring against their employer arising out of their employment or its termination.  Such claims will typically include:

  • Unfair dismissal
  • Redundancy
  • Any type of discrimination (e.g. sex, race, disability and age discrimination)
  • Any breach of contract
  • Any claims for non-payment of wages, bonuses and commission
  • Any holiday pay claims

The agreements are usually entered into as a full and final settlement of all claims an employee could bring against their employer. However, it is not uncommon for such agreements to exclude claims for personal injury and accrued pension rights.  Furthermore, there are certain claims that cannot be compromised in a settlement agreement, such as certain claims relating to the Transfer of Undertakings Regulations (TUPE) and the whistleblowing legislation.

It is essential to have your agreement reviewed by a specialist employment lawyer who will be able to advise you on the terms of agreement.


IMPORTANT: The contents of this page are for guidance only and do not constitute legal advice. You should consult a solicitor without delay if you require legal advice on a particular employment matter.

Answer by Alan Lewis, head of employment at Linder Myers Solicitors