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Directors Settlement Agreement


This Director’s Settlement Agreement has been updated to reflect legal changes brought about by the Equality Act 2010 (Amendment) Order 2012.

The aim of a settlement agreement is to settle a dispute in the workplace with an employee or ex-employee. 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.

A settlement agreement is legally binding on the parties.

A settlement agreement must specify the statutory claims being settled in order to be a binding waiver of those claims. Case law has shown that a ‘brief factual and legal description’ of the claim which has been raised by the employee (whether or not it is already the subject of legal proceedings) should be set out in the settlement agreement. Space has been provided for this purpose in the Schedule.

This Director’s Settlement Agreement contains a standard confidentiality clause requiring the employee to refrain from releasing details of the agreement. It complies with the Employment Rights Act 1996, Employment Act 2002, and the Equality Act 2010 (as amended), and is designed in accordance with current best practice.

The agreement is stated to be ‘Without Prejudice’ and clauses can be extended or deleted in accordance with Employer-Employee negotiation over employment termination. It contains clauses relating to a Company Car and also ‘post-termination obligations’ of the employee. The latter may not be necessary for more junior roles. For settlement agreements which are tailored to other levels of staff please click on the Related Documents links below.

This 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 Corporate Documents. Just £35.00 + VAT provides unlimited downloads from Corporate Documents for 1 year.

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