If you have a complaint against your employer that could take you to an employment tribunal, they may try to resolve that dispute to prevent you from making a claim or continuing to assert an existing claim. A settlement agreement (formerly known as a compromise agreement) is a legally binding agreement between you and your employer. This usually provides for severance pay from the employer in exchange for your consent not to make a claim in court or tribunal. The employer will usually ask you to keep the terms, such as the amount and circumstances of the termination of your contract, confidential. If a letter or discussion is not affected, it means that it cannot be used in legal proceedings, including legal action brought by an employment court.