In order for an employment settlement agreement to be valid and enforceable it must must satisfy certain conditions (which are set out in s.203(3) of the Employment Rights Act 1996).

The legal requirements of a settlement agreement are as follows:

1. The settlement agreement must be in writing;
2. The agreement must relate to a “particular complaint” or “particular proceedings” (i.e. to defined claims that you are settling under the settlement agreement);
3. You must have received legal advice from a relevant independent adviser (such as a specialist settlement agreement solicitor) on the terms and effect of the proposed agreement and its effect on your ability to pursue any rights before an Employment Tribunal;
4. The legal adviser that you instruct must have a current contract of insurance, or professional indemnity insurance, covering the risk of a claim by you against your legal adviser in respect of legal advice given;
5. The settlement agreement must identify the adviser; and
6. The settlement agreement must stated that the conditions regulating compromise agreement/settlement agreements have been satisfied

If your agreement does not meet the above criteria then it will not settle your statutory claims – this would mean that you would technically be able to pursue your (former) employer for your statutory rights. However, the practical effect of doing so will probably be that you will have to pay back some or all of the payments made to you under the settlement agreement).