Discrimination settlement agreement advice

If you've raised, or your employer suspects you might raise, a discrimination complaint. Relating to age, sex, race, disability, religion, sexual orientation or another protected characteristic. A settlement agreement is often used to resolve it without a tribunal claim.

Why discrimination settlements need extra care

Unlike most unfair dismissal claims, discrimination claims in an employment tribunal have no compensation cap. Awards can include injury to feelings, and in serious cases can be substantial. That changes the negotiation: a settlement figure that might look generous for an ordinary exit can be well below what a genuinely strong discrimination claim is worth. This is exactly the kind of judgement an independent solicitor needs to make, based on the specific facts, not a general guide.

What's usually included

• A compensation payment reflecting the strength of the claim, financial loss, and injury to feelings
• A reference agreed in advance, in writing. Particularly important if the exit relates to a dispute about your treatment
• Confidentiality and non-disparagement clauses. Worth understanding fully, especially if you might want to speak about your experience later
• A specific list of the claims being settled, rather than vague catch-all wording

A note on confidentiality clauses

Settlement agreements often include a confidentiality (sometimes called an NDA) clause. These are lawful, but recent scrutiny. Including moves to restrict misuse of NDAs to silence discrimination and harassment complaints. Means a well-drafted clause should not stop you reporting a criminal offence, whistleblowing to a regulator, or discussing your experience with close family, your solicitor, or a healthcare professional. See our guide on NDA clauses explained.

Discrimination by protected characteristic

The core legal principles are the same across all protected characteristics, but the facts that matter, and the evidence worth gathering, often differ:

• Age discrimination. Common in redundancy selection, forced retirement pressure, or being passed over for training and promotion in favour of younger colleagues.
• Disability discrimination. Often centres on a failure to make reasonable adjustments, or being treated unfavourably because of a condition, including ones that aren't visible.
• Gender discrimination. Covers unequal treatment, pay disparities, or being overlooked for opportunities because of your gender, including gender reassignment.
• Pregnancy and maternity discrimination. Includes being made redundant while on or shortly after maternity leave, having your role changed unfavourably, or facing pressure connected to a pregnancy.
• Religion or belief discrimination. Covers unfavourable treatment connected to your faith, or a lack of reasonable accommodation for religious practice.
• Sex discrimination. Broader than gender identity specifically. Covers unequal treatment, harassment, or unfair processes that disproportionately affect one sex.

Whichever characteristic is involved, the settlement principles are the same: get the payment properly assessed against the strength of the claim, not a generic exit figure, and make sure the reference and confidentiality terms are handled with the same care.

Questions worth asking before you sign

• Does the payment reflect the seriousness of what happened, not just a standard exit package?
• Is the reference wording agreed and attached, not just promised verbally?
• Does the confidentiality clause carve out my right to report wrongdoing or speak to close family and professionals?

Discrimination settlements are one of the situations where getting proper, independent advice matters most. Send us your agreement and we'll make sure you understand exactly what's being asked of you before you sign.

Wherever you are in the process, our confidential advice service is here to help.