A settlement deed is only as good as its release clause. Employers routinely pay a negotiated exit package assuming the matter is closed, only to find the same employee filing a fresh claim on a technical ground the deed never actually covered.
General releases aren’t general enough
A release that says the employee “releases all claims arising from employment” without listing specific statutory heads — unpaid leave, pension remittance, NSITF contributions, statutory notice — leaves exactly those heads open to a later claim. Nigerian courts read release clauses narrowly against the drafter when the language is vague.
Consideration has to be real and recited
A deed that does not clearly recite what was paid, when, and in exchange for what, invites an argument that the release was not supported by adequate consideration — particularly where the employee later claims duress or unequal bargaining power.
Draft the release as if you already know which specific claim will be filed against it — because eventually, one will test it.
The clean exit
A settlement deed that itemises every statutory entitlement, recites the consideration precisely, and is independently witnessed closes the file for good. One that is copied from a template rarely survives contact with a determined former employee and a competent NICN filing.
This note is general commentary on Nigerian legal practice and does not constitute legal advice or create a lawyer–client relationship. Outcomes depend on the specific facts and the applicable law at the time. For advice on a particular matter, speak with the firm.
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