If your mental health problems are due to a disability (see above), your employer has placed even more demands on them before they can fire you fairly, or they are exposed to the real risk that you will be able to invoke discrimination on the basis of a disability, as already mentioned. The Dahhan EAT referred the case back to court to determine whether Mr. D. had the mental capacity to enter into a contract. If this is reported, we may be able to become more aware of how this judgment would be rendered by a secular (non-medical) court. Until then at least, this case should not change the employer`s practice with respect to settlement agreements. Mental health is one of the most difficult employment problems in recent times and is on the rise, with a mental health problem of at least 1 in 4 people in this country each year. (See the report by Mind, the national organization that works to improve mental health.) Should employers who sign agreements with workers with mental health problems be concerned? There is only occasionally. This is due to the very high threshold of incapacity required before a contract entered into is cancelled under customary law and therefore constitutes an invalid basis for a settlement agreement. It is an indication of the level of this threshold that one of the predecessors of the current Mental Capacity Act 2005 was the fairly openly named Lunacy Act, passed in 1890 when I was still in Law School. It is absolutely not a question of reopening comparison agreements with employees suffering from “ordinary” stress, anxiety, delusions, bipolar disorder, depression, etc.