Full and Final? The Importance of Informed Consent in Employment Settlements

Settlement agreements often arise in the course of employment, whether that be severance agreements entered into when an employee exits from the organisation, or in the settlement of a third-party claim. While these agreements regularly include clauses outlining that they are full and final of all matters, particularly under employment legislation, this will not always prevent or preclude an employee taking a successful claim before the Workplace Relations Commission (WRC) or Labour Court. To mitigate this risk, a settlement agreement must follow normal contract law requirements i.e. offer, acceptance and consideration, and most importantly the employee must enter into the agreement freely, and with informed consent that they are waiving their rights.

The below cases are instances where employees had signed full and final settlement agreements upon termination of their employment, but subsequently lodged claims with the WRC.