Introduction
Settlement agreements are legally binding agreements between an employer and an employee that set out the terms surrounding the termination of employment. The purpose of settlement agreements is to resolve any disputes between the two parties that could not be resolved as part of internal procedures, and prevent future related claims. Settlement agreements often (but not always) result in the employer paying the employee, whether that be for example through compensation for loss of employment or payment in lieu of notice.
This research paper examines just how much money a range of NHS trusts have spent on settlement agreements in recent years and shows the highest settlements agreed in that time.
Key findings
- Between 2015-16 and 2017-18, at least 915 settlement agreements were made between NHS trusts and former employees totalling £27,978,661.
- The highest known settlement agreement paid to an individual was £148,771, paid by the Newcastle upon Tyne Hospitals NHS Foundation Trust.
- The UK-wide average size of a settlement was £20,573. If excluding NHS Fife, the individual trust with the highest average payment of £79,687 was from the Clatterbridge Cancer Centre NHS Foundation Trust. By contrast, there were 13 NHS Trusts who reported no spend on settlement agreements, as well as 2 with payments averaging below £1,000.
- The Royal Brompton & Harefield NHS Foundation Trust agreed 90 settlements, more than any other trust, totalling almost £2 million.
- The country with the highest average number of settlements, with 14 agreed on average per trust, was Northern Ireland.
- In Scotland, the average figure paid out was £29,497, the highest country-wide average when compared with England, Northern Ireland and Wales.
- An English NHS Trust meanwhile had the highest individual payment from anywhere in the UK of £148,771.