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It has remained ambiguous over which claims can be waived under the terms of a Settlement Agreement entered into between an employer and an employee.
Settlement Agreements offer a good solution to a dispute between an employer and its employee. It must clearly set out the reason and basis in which a settlement has been agreed between the parties. It usually entails the employee leaving their employment, agreeing not to bring any claims arising from their employment, nor spill the beans on the employer’s trade secrets nor bad mouth the employer to their friends or on any form of social media. In return, the employer will, most commonly, offer the employee a sum of money to exit their employment quietly and in confidence.
Whilst it is widely accepted that a Settlement Agreement serves to waive claims which the employee may otherwise have been entitled to bring, it has remained ambiguous over how far that waiver goes, especially with regards to any claims which may be unknown to the parties at the time of signing.
Recent case law has clarified this point. In the recent case of Bathgate v Technip Singapore 2023, it was held that future, unknown claims can be waived on the proviso that the Settlement Agreement must “refer and define” all and any particular complaints. In practice, all such claims must be identifiable and included in the list of claims being waived in “plain and unequivocal” language.
This recent case decision serves as useful guidance to employers on what constitutes “plain and unequivocal” wording which should be included in a Settlement Agreements especially where there is even the slightest possibility of any future claims arising, whether known to the parties or not at the time of signing
If you are considering offering an employee a Settlement Agreement, please do not hesitate to get in touch with one of our expert employment law solicitors who can help with the drafting of the terms. We can offer your business peace of mind and certainty that all claims, past and future, will be waived, leaving you to focus your energies on running your business.
If you have received a Settlement Agreement and you would like advice on the terms contained, or if you are an employer who would like an agreement drafted, please contact our employment team on 01827 317070 or employment@pickerings-solicitors.com
For more information go to the relevant page on Settlement Agreements:
The contents of this article are intended for general information purposes only and shall not be deemed to be or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.
