The Cabinet Office has published Cabinet Office Guidance on Settlement Agreements, Special Severance Payments and Confidentiality Clauses on Termination of Employment. The Guidance will apply from 1 February 2015wherepublic money is being paid as part of a settlement agreement or COT3 to terminate employment involvingcivil servants or non-civil servants employed by government departments or arm’s length bodiesand includes advice on the associated use of confidentiality clauses and special severance payments. The Guidance stipulates when a settlement agreement should not be used, (e.g. to avoid taking disciplinary action, cover up individual or organisational failure, etc.). It highlights that special severance payments outside of statutory or contractual entitlements will be rare. In addition, confidentiality clauses should not be used in settlement agreements as a matter of course, but if they are to be used then prior approval must be sought and Annex A provides standard wording. 

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