Employment legislation prevents employers from seeking to contract out of, or waive, statutory employment rights, duties and responsibilities. This is because employers and employees are usually in unequal bargaining positions. It follows that legislation designed to give employees rights would be ineffective if employers could persuade or pressurise employees to agree that such provisions should not apply.

However, where an employment dispute arises between an employer and an employee, it will often be in the interests of both parties for such a dispute to be resolved by agreement, given the uncertainties of legal proceedings, as they can be protracted and expensive. It is also important that the parties can rely upon any such agreement having binding effect.

This topic considers the requirements for a valid settlement agreement, the binding effect that it has and the enforcement of it.

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