Settlement agreement with an agreed reference and announcement

Many settlements turn on terms that cost the employer nothing: a reference the employee can use, an announcement that gives a neutral reason for the departure, and an agreement about what each side will say afterwards. The reference has to be one the employer can give without misleading a future employer, which is a duty the employer owes the recipient as well as the employee; the announcement has to work for colleagues, clients and the employee's professional profile; and the non-derogatory terms have to survive the years in which someone asks. For £795, fixed, delivered in three working days, I draft the agreement for the employer with a note on the conversation; the £995 version adds the negotiation with the employee's adviser.

Who this is for

Employers in England and Wales negotiating a departure where the employee's main concern is how it will look, and employers who want to know what they can safely promise about a reference.

What matters in an agreed reference and announcement

Why the reference and the announcement are often what settles it

An employee leaving under a cloud, or simply leaving, wants to be able to explain the departure and to get the next job, and an employer that offers an agreed reference and a neutral announcement often settles for less money than one that offers money alone; the agreement should attach both as schedules, require the employer to respond to reference requests in the attached form and to make the announcement in the attached words, and make the employer's compliance an obligation the employee can enforce, because a reference promised in the negotiation and not attached to the agreement is a reference the employee cannot rely on.

The reference the employer can safely give

An employer giving a reference owes a duty of care to the employee (not to be negligent in what it says) and to the recipient (not to mislead), and a reference that is accurate but materially incomplete can be misleading; the safe form is a factual reference (dates of employment, job title, duties, confirming that the employee left by mutual agreement or on a stated neutral basis), with no comment on performance or conduct, and the agreement should attach that form, say that it is the only reference the employer will give, and say that it is given without liability so far as the law allows; an employer that agrees a glowing reference for an employee dismissed for misconduct has exposed itself to the next employer.

Regulated roles and the reference the employer cannot promise

In financial services, care, education, healthcare and other regulated sectors, the employer may be required to give a regulatory reference in a prescribed form disclosing conduct matters, to make a referral to the regulator or to the disclosure and barring service, or to answer questions from a regulator truthfully, and no settlement agreement can prevent that; the agreement should say that the agreed reference is subject to the employer's regulatory obligations, should state what those are where the role is regulated, and should not promise a clean reference the employer cannot give, because a promise the law overrides is a breach the employer has written for itself.

The internal announcement and what colleagues are told

The agreement should attach the internal announcement (the employee is leaving on a stated date, a neutral reason or none, thanks for their contribution, the handover arrangements), state when and to whom it is made, and require managers to use it and not to speculate; it should also address what the employee may tell colleagues before the announcement, the employee's farewell communication where there is one, and the position of the employee's team, because an announcement made after the rumours is an announcement nobody believes.

The external line, social media and the employee's own account

The agreement should set the external line for clients, suppliers and the press (the same neutral form, with the handover contact), say who may be told what before the termination date, agree the position on social media (the employee may announce that they have left and where they are going after the termination date, may not disparage the employer, and the employer may announce the departure in the agreed terms), and address the employee's professional profile (the dates and title to be used, the employer's logo and name as the policy permits); the employee's own account of the departure is the one that spreads, and the agreement should give them an account they can give.

Non-derogatory terms, enquiries and the years that follow

The agreement should contain mutual non-derogatory undertakings (the employee not to make statements that disparage the employer, its officers or employees; the employer to instruct its directors and senior managers not to disparage the employee, which is as far as a company can bind its people), the carve-outs the law requires (the whistleblowing carve-out section 43J of the Employment Rights Act 1996 requires, truthful statements to regulators and courts, the Employment Rights Act 2025 provisions on non-disclosure terms concerning harassment and discrimination, commenced on a timetable the regulations set), a procedure for enquiries about the employee in future (routed to a named person who gives the agreed reference), and the consequences of breach (repayment of a stated sum); the terms last for years, and the agreement should be drafted for the enquiry that comes long after everyone involved has moved on.

What it costs

Settlement agreement, £795. Drafted for your situation, with a note on how to have the conversation. Three working days.

Settlement agreement including reasonable negotiation with the employee's adviser, £995. The agreement in three working days. The negotiation then runs until the agreement is signed or it becomes clear it will not settle. Reasonable negotiation means what, in my experience, amounts to the standard back and forth on a settlement agreement. If the employee or their adviser is being unreasonable, for example by conducting themselves unprofessionally or requiring a substantial rewrite that needs material further legal advice to you, I will flag it and we will discuss how best to proceed, which may involve further fixed-fee work. That would be unusual.

Buying online forms the engagement on payment. The scope is what the settlement agreements for employers page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A bespoke settlement agreement drafted for the exit you are dealing with
• Proper waiver of the relevant statutory claims, so the agreement does what you are paying for
• Advice on the tax treatment, including the £30,000 exemption and what falls outside it
• Confidentiality, non-derogatory statements and an agreed reference
• Reaffirmation or replacement of restrictive covenants, which is often the real value
• A short note on how to open the conversation and keep it without prejudice or protected
• One round of amendments after the employee's adviser responds

What is not included

• Advising the employee, which their own adviser must do independently for the agreement to be valid
• Tribunal representation if the matter does not settle
• Payroll processing of the settlement sums
• Handling the settlement payment, since I do not hold client money

Questions I am often asked

Can we agree to give a good reference?

You can agree a factual reference: dates, title, duties and a neutral reason for leaving. A reference praising an employee the employer dismissed for misconduct can mislead the next employer, to whom the employer owes a duty. The agreement attaches the safe form.

Our business is regulated. Can we still agree a reference?

Subject to the regulatory obligations, which the agreement states and which no settlement can override. A regulatory reference or a referral may still be required, and the agreement should not promise otherwise.

Can we stop the employee saying anything about us on social media?

You can agree mutual non-derogatory terms with the carve-outs the law requires, and the employee can still say they have left and where they are going. Whistleblowing and truthful statements to regulators cannot be restricted.

Related guidance and services

• Settlement agreements for employers, £795, the service this page describes
• Employment contracts and handbooks, £595
• Shareholders agreement, £995
• Settlement agreement after a disciplinary process
• Settlement agreement to exit a senior employee

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: October 2026. Email geoffrey@caesar.co.uk.