Comparison of settlement agreements: ROI v GB

By Sinead Morgan, Sara Meyer, Josh Hornsey and Katie Doherty

Published 10 August 2026

Overview

We continue our series of comparison between Great Britain (GB) and the Republic of Ireland (ROI). In this article, we will summarise the key considerations when drafting settlement or compromise agreements in GB and the Republic of Ireland. Although there are parallels in the way settlement works in practice, there are some key differences which employers and practitioners should be live to when drafting these agreements.

Please note that a separate regime applies in GB where settlement is achieved via Acas early conciliation, in which a simpler form of settlement agreement (known as a COT3) is used. The table below covers standard settlement agreements only.

	GB	ROI
Statutory framework	Employment Rights Act 1996 ("ERA") (s.203) and related statutes (e.g. Equality Act 2010).	Not governed by a single statute. Derived from various legislative provisions together with contract law and common law principles.
Requirements	Under Section 203 of the ERA a settlement agreement is only valid if: It is in writing It relates to particular complaints or proceedings The employee has received independent legal advice The legal adviser is: Qualified (e.g. solicitor, barrister) Insured The adviser is identified in the agreement The agreement confirms statutory conditions are satisfied Focus on compliance with statutory requirements.	Conditions not set out in Statute. The following requirements have evolved through caselaw to ensure the agreement is enforceable: Offer, acceptance, intention to create legal relations and consideration Agreement must be in writing, clear, and unambiguous Specific waiver of statute and claims Employee must have full knowledge of rights being waived and the opportunity to take independent legal advice The waiver must be informed and voluntary Focus on informed consent, rather than strict statutory formalities.
Waivers	Waivers of claims are not a statutory requirement but in practice are included in every settlement agreement Statutory claims must be identified with enough particularity to be waived, either by generic description or statutory reference A general waiver of “all statutory claims” will not usually be enough Unknown future claims can be waived if the wording is absolutely plain and unequivocal and the relevant claims are properly identified Some claims cannot be waived, including most accrued pension rights, future personal injury claims and certain statutory rights such as claims for failure to inform and consult on a TUPE transfer, protected zero-hours and blacklisting claims	The position is somewhat similar in ROI with the following nuances: Waivers of claims are not a statutory requirement in Ireland but are routinely included in settlement agreements to achieve a full and final resolution of disputes A general waiver of “all statutory claims” will not usually be enough - statutory claims should be identified with sufficient specificity to be validly waived, whether by reference to the relevant legislation or by a clear description of the claim and reference number Unknown claims may be waived where the wording is clear, unambiguous and the employee's consent is informed, with legal advice having been taken - Irish courts will scrutinise such waivers carefully Certain claims may not be capable of waiver, including future personal injury claims that are unknown at the date of settlement, accrued pension rights (subject to scheme rules) and statutory rights which legislation expressly preserves, for example, under protected disclosures legislation
Legal advice	Independent legal advice is required -the agreement will not validly waive statutory claims unless the employee has received advice from a relevant independent adviser on the terms and effect of the agreement and its effect on their ability to bring tribunal claims (see 'Requirements' above) Employers commonly contribute to the employee’s legal fees - where the advice relates solely to termination of employment the contribution to fees may be made free from tax under the legislation on the taxation of termination awards	Not required under statute but caselaw indicates that "independent legal advice" required to ensure agreement is enforceable Common practice to contribute to fees No requirement for certification that legal advice was provided within agreement
Taxation	A £30,000 tax-free exemption applies only to qualifying termination awards that are not treated as post employment notice pay ("PENP"). If the employee does not serve their full contractual notice period, the PENP provisions must be applied to determine how much, if any, of the relevant termination award must be treated as PENP. Any amount treated as PENP is taxed as earnings and subject to employer and employee national insurance contributions.	Ex gratia payments may benefit from: Basic exemption (€10,160 plus €765 per year of service) Increased exemptions of €10,000, subject to specific conditions Standard Capital Superannuation Benefit ("SCSB") formula which tends to benefit those on higher salaries with long service Complex Revenue rules apply - separate tax advice should be taken
Confidentiality	Confidentiality clauses and non-disclosure agreements (NDAs) are common but should be used with care and tailored to the circumstances. In the public sector, their use is less common, as Treasury approval may be needed for settlement agreements that include confidentiality provisions. Clauses must not prevent protected disclosures, criminal or regulatory reports, cooperation with investigations, disclosures required by law, or disclosures to professional advisers. They commonly also permit disclosure to close family members. Changes due to be introduced in 2027 will prohibit NDAs that seek to prevent disclosures about discrimination or harassment.	Common in settlement agreements. The use of confidentiality clauses /NDAs have been limited by Statute as follows: Any NDA is unenforceable as far as it attempts to restrict a protected disclosure under the Protected Disclosures (Amendment) Act 2022 The Maternity Protection, Employment Equality and Preservation of Certain Records Act 2024 introduced statutory restrictions on NDAs in cases involving allegations of discrimination/harassment/sexual harassment/victimisation NDAs are automatically void unless narrowly defined ‘excepted NDA’ conditions are satisfied
Challenges	GB settlement agreements can be challenged for the following reasons: Statutory requirements not met Defective independent advice Misrepresentation, duress, undue influence, incapacity, mistake, uncertainty, or other common law grounds Focus on technical defects.	ROI settlement agreements can be challenged for various reasons to include the following: Employee did not understand the waiver Misrepresentation or undue influence Lack of legal advice Focus on fairness and understanding of employee
Without prejudice correspondence/discussions	The without prejudice rule prevents statements made in a genuine attempt to settle an existing dispute from being used as evidence in court or tribunal proceedings. There must be an existing dispute The communication must be a genuine attempt to settle the dispute Marking correspondence “without prejudice” is helpful but not decisive Protection can be waived by consent and may be lost in clear cases of unambiguous impropriety	The requirements in ROI generally mirror those in GB Given the pre-conditions to avail of w/p protection, in practice, most w/p discussions take place between legal representatives rather than employer and employee in ROI
Protected conversations	Under section 111A of the ERA 1996, pre-termination negotiations are inadmissible only in ordinary unfair dismissal proceedings. This does not apply to all future proceedings, and may be limited where there has been improper behaviour.	No provision for protected conversations in ROI. Any discussions can be referenced in future proceedings and can undermine any future disciplinary process initiated to exit an employee.