Q&As

Is it possible for a settlement agreement, entered into on termination of employment, to include a provision preventing the employee from being re-employed by the same employer?

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Published by a ÑÇÖÞÉ«ÇéÍø Employment expert
Published on: 22 October 2019
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There is no specific provision that makes it unlawful for a settlement agreement to include a provision preventing the employee from being re-employed by the same employer.

However, such a provision is unusual, because:

  1. •

    it will usually be in the employer’s gift to decide whether or not to re-employ the employee at a future date

  2. •

    where the settlement agreement is entered into after the employment relationship has broken down, the ‘risk’ that the employee will seek re-employment is often perceived as low

Addition factors making such a provision unlikely include:

  1. •

    the risk of potential claims for victimisation in recruitment under the Equality Act 2010 (EqA 2010)

  2. •

    the principle of restraint of trade

  3. •

    possible alternatives to a ‘no re-employment’ clause, eg repayment provisions

Victimisation

A person victimises an individual if:

  1. •

    they subject that individual to a detriment

  2. •

    they do so because:

    1. â—¦

      that individual performed a ‘protected act’, or

    2. â—¦

      they

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Settlement definition
What does Settlement mean?

The payment or collection of proceeds after trading a security. Settlement usually takes place some time after the deal and price are agreed.

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