LABOUR AND SOCIAL SECURITY DIVISION
Some documents appear to bring a dispute to an end and yet leave the door open. This is precisely what the Supreme Court reminds us in Judgment 532/2026, of 10 June: a private agreement signed following a dismissal may not have a full and final settlement effect, even if the employee has signed it.
It is common for companies and employees, following a dismissal and with the aim of avoiding court proceedings and months of uncertainty — particularly as the courts are increasingly congested and hearings are often scheduled years in advance — to prefer to resolve the matter through a settlement agreement. This is usually documented by means of a private agreement signed in advance, with the parties undertaking to ratify it at the relevant administrative conciliation hearing.
The problem arises when the private document seeks to secure a swift settlement while combining incompatible formulations. This is where an agreement intended to reduce risk can instead become a new source of litigation.
Supreme Court Judgment 532/2026, of 10 June, examines a case in which, following a disciplinary dismissal, the company and employee signed an agreement on the same day under which the company acknowledged that the termination was unfair and offered €20,000 in compensation, compared with a statutory amount of approximately €60,000, together with the employee’s final settlement payment.
The employee accepted the amount in order to avoid court proceedings and accordingly signed the agreement. However, on the date scheduled for the administrative conciliation hearing prior to judicial proceedings, the employee changed his mind and refused to ratify the agreement reached, subsequently bringing proceedings against the company to challenge his dismissal.
The Supreme Court confirmed that, in the specific circumstances of the case, the agreement could not be recognised as having full and final settlement effect because the privately signed document contained contradictory statements that created confusion and lacked internal coherence.
The judgment reminds us that the mere signing of a document acknowledging that a dismissal is unfair and specifying compensation does not, in itself, turn the agreement into an effective shield against future litigation.
This has an immediate practical consequence: a generic template should not be used to document a settlement concerning a dismissal.
The key point: signing is not enough
First ingredient: clarity. The document must identify the dispute that the parties intend to resolve, the amounts payable under each heading and the obligations that are being definitively discharged. A general waiver provides little protection if other provisions of the agreement create uncertainty.
Second: genuine negotiation. If the agreed compensation is lower than the amount that would be payable in the event of an unfair dismissal, it should be evidenced that this difference formed part of the negotiation. The company is not simply “paying less”; it is purchasing certainty and avoiding litigation.
Third: informed consent. The Supreme Court attaches importance to the circumstances in which the agreement is signed. In the case under review, the dismissal and signing of the agreement took place on the same day, and there was no evidence that the employee had been given a genuine opportunity to consider the document and obtain advice. A standard statement confirming that the employee has been able to seek advice does not necessarily replace a genuine opportunity to do so.
Fourth: temporal consistency. If the agreement is effective from the moment it is signed, this should be stated unambiguously. If the subsequent conciliation hearing serves solely to formalise or implement the agreement, that function should be clearly distinguished from the validity of the agreement itself. Conversely, if the intention is for its effectiveness to be conditional upon the conciliation hearing, this should also be expressly stated.
To help ensure the validity of the private agreement, the following questions should be considered before signing: Is the compensation and final settlement payment clearly itemised? Does the document record that the employee understands the difference between the amount offered and the amount they could potentially obtain through litigation? Is there evidence of genuine negotiation? Has the employee had a reasonable amount of time to review the document? Is it clear when the obligation to make payment arises? Is the subsequent conciliation a formality or a condition? Is the waiver of claims linked to an actual payment that is clearly identified?
A few additional minutes of negotiation and more precise drafting can prevent months of litigation.
The best defence of a private settlement agreement is not to accumulate waiver clauses, but to demonstrate that a genuine settlement took place behind the document: a specific dispute, reciprocal concessions, sufficient information, free consent and a clear commitment to make payment.
Ultimately, Supreme Court Judgment 532/2026 requires us to change the question. It is no longer sufficient to ask: “Has the employee signed?” The question that matters from a business perspective is a different one: “If litigation arises tomorrow, will we be able to demonstrate that this agreement genuinely brought the dispute to an end?”
If the answer lies in the document, the negotiation and the traceability of the process, the agreement ceases to be merely a promise to bring the matter to a close and becomes a genuine tool for preventing employment-related risk.
It should be borne in mind that, in employment matters, bringing a dispute to an end does not simply mean putting a full stop on paper; it means ensuring that we have all the necessary tools to defend the agreement so that the dispute cannot subsequently be reopened.
