What claims can a settlement agreement settle?
I explain what claims a settlement agreement can settle, including unfair dismissal, discrimination, redundancy pay and holiday pay, and why the waiver must identify specific claims rather than rely on a vague all-claims catch-all.
A properly drafted settlement agreement can waive most of the statutory employment claims you might bring in an employment tribunal. That includes unfair dismissal, discrimination and harassment under the Equality Act 2010 (covering age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation), equal pay, unlawful deductions from wages, redundancy pay claims, working time and holiday pay claims, national minimum wage claims, and detriment claims such as whistleblowing.
It can also settle contractual and common law claims, such as breach of contract and wrongful dismissal, which are governed by ordinary contract law rather than the special settlement-agreement rules.
To be effective, the agreement must identify the claims being settled rather than rely on a vague “all claims” catch-all. Following the case of Hinton v University of East London, the claims should be described specifically — by type (for example “unfair dismissal”) or by reference to the relevant section of the statute. When I advise on a settlement agreement, I make sure the waiver is clear and that you understand what you are giving up.