II When settlement agreements are used
When settlement is proposed – understanding the real situation
You’re called into a quiet meeting. Your manager says she wants to talk “off the record” about your future.
You sit down. She hesitates, then says it.
“You’re underperforming. We’d rather avoid a process… what if we agree this exit package?”
She slides a document across the table. The cover sheet reads “Settlement Agreement”.
Your sales figures haven’t gone through the roof, they might even be trending downwards. So, you knew this wasn’t a conversation about making you “employee of the month.” But still, where’s the pep talk? Are they not even going to try some performance improvement or support? Why is no one even pretending to fix things? What exactly is happening here?
This guide is here to cut through the fog. Not with legal jargon, but with practical insight. It won’t make you an employment law expert. But it will help you understand the lie of the land:
Why your employer is doing this now
What protections they’re relying on
What pressure tactics are allowed (and what crosses a line)
What happens if you don’t sign
How you can keep your options open
Once you know the landscape, the document in front of you stops being something to fear and becomes what it really is: a proposal. And proposals can be questioned, countered, improved….or even walked away from.
So, before you sign anything, step back. Read the situation.
Let’s get into it…
Six common settlement scenarios
Settlement agreements are a big deal. They’re also the result of a literal deal with your employer (or ex-employer, perhaps by the time the ink is dry). If you’re in the middle of the process and feeling a bit overwhelmed, or just curious about what it all means, this guide is for you
Why employers propose settlement
A settlement offer doesn’t always follow a dispute. Sometimes it’s made to prevent one. The classic scenario is where you raise complaints about bullying, discrimination, harassment, or other sensitive issues, and your employer proposes a settlement early on.
How they calculate settlement offers
You can waive specific, identified claims up to the date you sign, but some rights can’t be signed away. A typical waiver covers claims like unfair dismissal, redundancy, breach of contract, discrimination, whistleblowing, and other employment-related disputes.
Settlement agreements are rarely random
If one is put in front of you, it usually means your employer has already weighed risk, cost, and control. What looks sudden to you is often the end of a long internal discussion.
The key thing to remember is this: you are not required to decide anything in the room. A settlement agreement is a proposal — and proposals can be questioned, improved, or rejected.