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