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Directors Settlement Agreement


Settlement agreements (previously called compromise agreements) are documents that set out the terms and conditions agreed by the employer and employee to settle a potential employment tribunal claim or other court proceedings.

The employee agrees not to pursue claims against the employer, in return for a financial settlement. The objective for the employer is to avoid the cost of lengthy or divisive litigation arising out of an employment tribunal, as well as avoiding any reputational damage.

This particular agreement is designed to be used for Company directors where post-termination restrictions (or restrictive covenants) are required. In this settlement agreement, there are references to commission and bonus arrangements and a requirement to resign from various offices.

A Settlement Agreement is legally binding on the parties.

Clauses can be amended or deleted in accordance with the terms of the agreement. 

A settlement agreement is voluntary, and the employee needs to be given reasonable time to consider a settlement agreement offer.  ACAS recommends an employee is given a minimum period of 10 calendar days to consider the terms of the settlement agreement and seek professional advice.

The settlement agreement template is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.

Directors Settlement Agreement is part of Employment Documents. Just £35.00 + VAT provides unlimited downloads from Employment Documents for 1 year.

This document can also be downloaded from:

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