FAQ: What is a Record of Settlement (ROS)?
If you are sorting out a problem with your employer, you may be asked to sign a record of settlement, often called an ROS. The name sounds simple. But this document can have a lasting effect on your rights, your job and what you can say about your experience.
Before you sign, you need to understand what you are agreeing to, what you will receive and what you are giving up.
What does a record of settlement do?
An Record of Settlement (ROS) sets out an agreement to resolve an employment problem. It records the promises made by you and your employer. In New Zealand, an ROS signed by both parties and an authorised Employment Mediation Services mediator becomes a final, binding and enforceable settlement under section 149 of the Employment Relations Act 2000.
The mediator explains the effect of signing and checks that both parties understand and want the settlement finalised. They must also check that neither party has agreed to give up minimum employment entitlements. The mediator is independent. They do not give you personal legal advice.
When will an ROS be used?
An ROS may be used to settle a personal grievance, such as a dispute about dismissal, bullying or unfair treatment. It can also record an agreed exit from employment or a solution that allows you to stay in your job.
For example, you might agree to:
Leave employment on an agreed date and receive a settlement payment,
Return to work under a different manager,
Withdraw a grievance in exchange for agreed steps to resolve the problem, or
Settle an existing dispute before it reaches a hearing.
Signing an ROS does not always mean resigning. Check what your particular agreement says.
You do not need to attend mediation first to have a ROS. If you reach an agreement through direct negotiations or your representatives, the draft can be submitted to Employment Mediation Services for signing.
Who writes it?
At mediation, the mediator may write down the agreed terms.
Outside mediation, an employment advocate, union representative, lawyer or employer representative may prepare the draft. Both sides should have the chance to review it and request changes.
Remember, the person writing the document may be acting for your employer. Their draft needs careful checking, even if it looks standard. Your own representative can help negotiate the wording and explain how it affects you.
What will it include?
The contents depend on the dispute and the deal reached. Common terms include:
The parties and the dispute. The document identifies you and your employer using the correct legal names and explains which issues are being settled.
Payments. It should clearly separate any settlement payment from wages, holiday pay, notice pay or other amounts owed. Check payment dates, deductions and whether figures are before or after tax.
Your employment arrangements. If you are leaving, it should state when employment ends, whether you will work your notice and how the departure will be described.
Practical promises. These might cover returning equipment, providing a reference, removing a warning or making an agreed workplace announcement.
Confidentiality and comments. There may be limits on sharing the settlement or making negative comments about each other.
The claims being settled. A 'full and final settlement' clause explains which claims you agree to bring to an end.
An agreement may also say that neither side admits fault. A settlement payment does not necessarily mean your employer accepts that they acted unlawfully.
What should you know before signing?
Understand which rights you are giving up
Read the release of claims carefully. Is it limited to one grievance, or does it cover a wider range of issues connected with your employment?
Ask your representative to explain the wording using your circumstances. Do not assume an issue is excluded just because it was not discussed much.
Check every payment
Ask for a clear breakdown. For example, does a proposed $10,000 payment include your final wages and holiday pay, or are those paid separately?
Check what you will actually receive after any lawful deductions and agreed representation fees. Do not assume that calling a payment 'compensation' makes it tax-free. Get advice if the tax treatment is unclear.
Make sure every important promise is written down
If a reference matters, ask for its wording to be attached. If your employer has promised to tell staff that you resigned, check that the agreed message is recorded. Vague promises such as 'we will sort that out later' can leave room for disagreement.
Read the ongoing obligations
Before accepting confidentiality or a promise not to make negative comments, ask:
Who can I discuss this with, including family and professional advisers?
What disclosures are allowed or required by law?
Does the obligation apply to my employer too?
Could a social media post breach the agreement?
If a clause is too broad or unclear, ask for it to be changed before signing.
Take time and get independent advice
You can say “I need time to read this and get advice before I agree.” If you feel pressured, unwell or unable to understand the document, tell your representative and the mediator. Ask for a break, an explanation or an interpreter if needed.
Can you change your mind after the ROS is signed?
Treat an ROS as final. Once properly signed under section 149, it cannot ordinarily be reopened or cancelled simply because you regret the deal. There is no general cooling-off period.
If your employer breaks the agreement, you can seek enforcement through the Employment Relations Authority or Employment Court. Contacting the signing mediator may help encourage compliance first.
Mathews Walker’s employment advocates can help you negotiate a settlement, check the proposed terms and understand your options before you commit. If you have been given an ROS and are unsure what it means, contact Mathews Walker before signing.
Disclaimer: The information provided in this blog is for general informational purposes only and should not be considered legal advice. While we strive to keep the information accurate and up to date, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained on the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. For specific legal advice tailored to your situation, please contact a qualified legal professional.
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