Top universities paid out more than £15m in settlement agreements

The UK’s top universities paid out more than £15m for hundreds of settlement agreements in the last academic year.

The freedom of information (FOI) requests showed that the universities paid a total of £15,266,846 to 511 staff under settlement agreements.  Universities explained these figures were “in the context of voluntary severance arrangements as a consequence of restructures and staffing reductions”.

Settlement agreements, which were known as compromise agreements until July 2013 can be controversial because they sometimes contain non-disclosure agreements (NDAs), or ‘gagging clauses’, preventing staff from speaking out about bullying and harassment. However, it has been reported that measures are currently being drawn up to ban these clauses.

Even where an employer has a fair reason for dismissal, such as a restructure or redundancy, and has followed a dismissal procedure, a settlement agreement may be used to reduce the risk of being taken to an employment tribunal. With fees being removed and tribunal claims increasing, settlement agreements may be seen as a method of ensuring there is no dispute once the relationship ends, even if both parties were happy with the conclusion of the relationship.