No Termination Settlement Agreements

It is often thought that a Settlement Agreement is only used to bring the employment relationship to an end. However, it is possible to reach a binding settlement agreement and for the employee to continue in employment afterwards. With a no termination agreement, the intention is that, in return for a compensation payment, the employee waives all and any claims they may have against the employer in connection with a specific complaint and to a certain date to the full extent permissible by law. This may be appropriate in cases where the employment relationship has not fundamentally broken down. Examples may include settlement of an unlawful deductions from wages or breach of contract claim, or complaints of discrimination or harassment in circumstances where the employer has dealt with the employee's complaint to the employee's satisfaction and the parties have agreed a compensatory payment. One thing to note is that unless a payment is in relation to discrimination, it is unlikely to qualify as a tax-free payment and therefore would be subject to the usual deductions. If you would like further information on a No Termination Settlement Agreement, or a copy of how such an agreement looks please email hina@partnerslaw.co.uk /hbelitz@excellolaw.co.uk or contact us on 0207 374 6546.