Post Settlement Agreement Template for England and Wales

A Post Settlement Agreement is a crucial legal document that formalises the ongoing relationship between an employer and employee after an initial settlement agreement has been concluded. Under England and Wales employment law, this document ensures that all parties understand their continuing obligations and rights following the resolution of an employment dispute or termination.

When do you need this document?

You will need a Post Settlement Agreement when you have already resolved an employment matter through an initial settlement but require clarity on ongoing obligations. This typically occurs when the original settlement agreement contained provisions that extend beyond the immediate termination, such as garden leave arrangements, non-compete clauses, or staged payment schedules. The document becomes essential when you need to confirm that settlement terms have been met, establish reference procedures, or clarify continuing confidentiality obligations. It's also required when modifying aspects of the original settlement or when addressing unexpected issues that arose after the initial agreement was signed.

Key legal considerations

Several critical legal elements must be addressed in your Post Settlement Agreement to ensure enforceability under England and Wales law. Confidentiality clauses must be carefully drafted to protect both parties while remaining reasonable in scope and duration. Any restrictive covenants, such as non-compete or non-solicitation clauses, must satisfy the legal test of being reasonable in terms of geographical scope, duration, and business interests protected. Tax treatment of any ongoing payments must be clearly specified to ensure compliance with HMRC requirements and avoid unexpected liabilities. The agreement must also confirm that all statutory employment rights have been properly addressed and that any claims waiver remains valid and comprehensive. Independent legal advice requirements must be satisfied if the agreement varies terms that were subject to statutory protections in the original settlement.

Legal requirements in England and Wales

Under the Employment Rights Act 1996, Post Settlement Agreements must meet specific statutory requirements to be legally binding. The employee must have received independent legal advice from a qualified adviser regarding the terms and effect of the agreement, particularly any waiver of employment tribunal claims. The agreement must be in writing and clearly identify the particular proceedings or claims to which it relates. It must satisfy the conditions laid down in section 203 of the Employment Rights Act 1996 for settlement agreements. The Equality Act 2010 requires that the agreement does not discriminate against protected characteristics or compromise statutory equality rights unlawfully. Any restraint of trade clauses must comply with common law principles requiring them to be reasonable and necessary to protect legitimate business interests. The Working Time Regulations 1998 may apply if the agreement addresses holiday pay or working time arrangements, while the Unfair Contract Terms Act 1977 ensures that exclusion clauses are fair and reasonable.