When an employer and an employee after mutual consultation agree on termination, and lay down such agreement in a settlement agreement, it is often also agreed that the parties will grant each other full and final discharge.

The following is an example of a clause often included in a settlement agreement with regard to the termination of the employment agreement:

• By and after the implementation of this agreement, the parties shall have no further claims against each other and shall grant each other full and final discharge in respect of the employment agreement, the termination thereof and/or in other respects.

What does this in fact mean? This means that after the agreements as agreed upon in the settlement agreement have been implemented, both the employer and the employee shall have no further claims against each other.

It is, therefore, important to discuss all possible claims during the negotiations preceding the preparation of the settlement agreement and to come to an agreement in respect of such claims.