Can Settlement Agreements Waive Future Employment Claims? The Court of Session Says Yes
A recent ruling from the Scottish Court of Session has brought much-needed clarity for employers using settlement agreements to resolve employment disputes. In Bathgate v Technip Singapore PTE Ltd, the court confirmed that settlement agreements can validly waive future claims—even if those claims haven’t arisen or been known about at the time of signing.
This marks a significant shift away from the previous Employment Appeal Tribunal (EAT) position, which suggested that only existing claims could be settled. While the decision is technically only binding in Scotland, it’s likely to be followed across the UK due to the clarity it provides on an area of law that has long been unsettled.
The Legal Background
Settlement agreements are widely used by employers to ensure a clean break when employment ends. They allow employees to waive statutory claims (such as unfair dismissal or discrimination) in return for compensation or other agreed terms.
However, a key requirement under the Employment Rights Act 1996 is that the agreement must relate to a “particular complaint”. Until now, there has been legal uncertainty over whether this requirement prevented employers from using settlement agreements to protect against future claims that had not yet arisen at the time of signing.
In Bathgate, the claimant signed a settlement agreement on taking voluntary redundancy. After signing, the employer decided not to make a payment to staff over 60, and the claimant brought an age discrimination claim. He argued that this claim couldn’t have been waived, as it hadn’t yet arisen when he signed the agreement.
What Did the Court Decide?
The Court of Session disagreed with the EAT and found that:
Future claims can be validly waived through a settlement agreement, even if they arise or become known only after signing.
What matters is that the agreement clearly identifies the types of legal claims being waived.
The requirement for a settlement to relate to a “particular complaint” does not mean the issue must have already occurred — but it does mean the agreement must specifically identify the category of claim.
In this case, the age discrimination claim was covered because the agreement listed it clearly, even though the facts giving rise to it occurred later.
✅ What Employers Should Do Now
This is good news for employers. The judgment reinforces the ability to achieve a true clean break through a settlement agreement—but there are still important drafting considerations:
Be specific: Use precise language and list the types of claims the employee is waiving. A blanket waiver of “all claims” is unlikely to be enforceable.
Don’t overreach: Avoid including claims that are completely irrelevant to the individual (e.g. pregnancy-related claims for a male employee) as it can weaken the agreement’s validity.
Consider a two-stage agreement: While this decision reduces the need for a second confirmatory agreement post-termination, it may still be helpful in some cases (e.g. to incentivise behaviour or for tax clarity).
Keep ACAS in mind: ACAS-conciliated settlements remain useful for group claims or where parties prefer not to list specific complaints.
Tailor each agreement: One size doesn’t fit all. Settlement agreements must reflect the circumstances and risks involved in each individual case.
FAQs: Settlement Agreements and Future Claims
Q: Can we now use one agreement to settle all claims—even those that haven’t arisen yet?
A: Yes, provided the agreement lists the specific types of claims being waived. A general “waiver of all claims” without detail won’t be valid.
Q: Does this mean we could issue a settlement agreement at the start of employment to block all future claims?
A: In theory, the ruling opens the door to that—but in practice, it’s highly unlikely employees (or their legal advisers) would agree to such terms. It would also raise fairness concerns and could be challenged.
Q: Is this decision binding across the UK?
A: No—it’s binding only in Scotland. However, it’s likely to influence tribunal decisions in England and Wales because it addresses a gap in the law and resolves conflicting EAT decisions.
Q: Do we still need to involve ACAS?
A: Not necessarily. While ACAS agreements remain valuable—especially in group settlements—they’re no longer the only way to settle future claims. That said, ACAS conciliation is still faster and may involve fewer legal costs.
Q: Should we change our settlement agreement templates?
A: Yes. This is a good time to review and update your standard templates to ensure they identify claims with enough specificity and reflect the current legal position.
Final Thoughts
The Bathgate decision offers welcome clarity for employers and legal practitioners. It confirms that future claims can be settled, providing the language used is sufficiently precise and tailored to the risks involved.
If you’d like support reviewing or updating your settlement agreement templates—or guidance on negotiating exits with employees—our employment law team is here to help.