Updating Your Settlement Agreement Templates for 2025 Legal Changes

Driven by this year’s changes brought about by the Employment Rights Bill, the landscape for settlement agreements is shifting as forthcoming updates could mean that precedent agreements used as recently as last year could need to be amended to avoid exposing businesses to risk. With help from trusted professionals at Glaisyers ETL, you can ensure that your settlement agreement precedent is fully compliant. For HR managers and business owners having a basic understanding of the legal principles underpinning settlement agreements is critical to protecting the businesses’ reputation, maintaining employee relationships and most importantly, mitigating the risk of legal claims. 

What are the Key Changes?

When the new Employment Rights Bill comes into force, Non Disclosure Agreements (NDAs) used by employers against workers will be void if they are attempting to prevent the worker from making allegations or a disclosure of information relating to discrimination or harassment.  This will include NDAs in settlement agreements. It is therefore important that business owners and HR teams make sure that their precedent Settlement Agreements are up to date.  

Common Mistakes and How to Avoid Them

Even with correct precedent documents, businesses frequently encounter avoidable mistakes. Ambiguous language and unclear terms, or clauses that conflict with statutory rights are common triggers for disputes. Generic, blanket waivers can be problematic if they don’t properly cover all of the claims relevant to a specific employee which need to be waived. HR teams should also be mindful to give employees proper time to consider the terms of a settlement agreement so not to be seen as placing employees under undue pressure. They should also ensure that the employee has taken proper legal advice on the terms and effect of entering into the settlement agreement as both these factors can affect the legitimacy of the agreement. 

Practical Guidance for Employers

Updating settlement agreements is not just a compliance exercise, it is a tool to minimise the businesses’ exposure to the risk of claims. Here are some simple steps you can take to start your company’s review process. 

• • Step One: Audit your existing templates for outdated clauses. 

• • Step Two: Identify any generic language that could create ambiguity. 

• • Step Three: Review confidentiality clauses in line with the Employment Rights Bill changes.  

• • Step Four: Contact an employment lawyer at Glaisyers ETL to provide bespoke advice. 

By reviewing and updating templates for 2025, employers can reduce their exposure to legal claims, protect their organisation’s reputation, and demonstrate a commitment to fair and careful practices.  

Need a Hand?

Schedule a consultation with a member of our team at Glaisyers ETL to ensure your settlement agreement templates are fully compliant, or get help drafting a new one if they’re out of date.