Where there are allegations of discrimination or whistleblowing, settlement negotiations become more sensitive and potentially higher‑value.
Impact on negotiation
Potential claims for discrimination (for example, related to sex, race, disability, age or religion) or protected disclosures can significantly increase legal risk for employers. Tribunals can award:
- Injury to feelings
- Financial loss with limited or no cap in some cases
- Aggravated damages and interest
This often justifies a higher settlement figure than in a straightforward unfair dismissal case.
What can and cannot be waived
Settlement agreements can usually waive:
- Existing and potential statutory discrimination claims
- Claims arising from protected disclosures
However, they cannot lawfully prevent:
- Genuine whistleblowing to regulators
- Reporting criminal offences
- Co‑operating with regulatory or law‑enforcement investigations
Clauses that attempt to gag such disclosures may be unenforceable and can cause serious regulatory problems.
Importance of careful drafting
The agreement should:
- Avoid any suggestion of buying silence about criminal conduct
- Use compliant wording around protected disclosures
- Ensure confidentiality clauses are reasonable and proportionate
Given the sensitivity, both sides should take specialist advice before finalising terms.
