Personnel Today have reported that ACAS have announced that there will be a new consultation on a Code of Practice on settlement agreements (read more legal advice on settlement agreements on WardBlawg here).
The Government announced in June 2012 that settlement agreements would replace the current “compromise agreements”, with the intention of making it easier for employer to address and settle workplace disputes without recourse to Employment Tribunal proceedings.
The current position is that of “compromise agreements”. A compromise agreement is a contract (regulated by statute) that allows an employer and an employee to settle a workplace dispute without recourse to the Employment Tribunal or civil courts. In exchange for some form of benefit (either financial or non-financial) the employee agrees not to make a statutory or common law claim against their employer.
Although the substantive position is not changing (in that the new settlement agreements are intended to achieve the same objective) the Government has sought to make the following amendments to such agreements:
- Simplifying compromise agreements
- Making discussions with a view to entering into a settlement agreement “without prejudice“
The Government is seeking to introduce pro-forma settlement agreements and detailed guidance so that smaller employers can use these agreements without incurring large legal fees. There is also the intention to make discussions with a view to entering into a settlement agreement “without prejudice” so that employees cannot use such discussions as evidence in any future Employment Tribunal proceedings (should they reject the settlement agreement). This is intended to make such discussions as full and frank as possible.
As stated above, ACAS is seeking to introduce a Code of Practice for settlement agreements and has today launched a consultation regarding this. Once the responses to the consultation have been gathered an ACAS Code of Practice will be drafted and this will sit alongside the relevant legislation to help businesses and employees understand how settlement agreements work in practice (akin to the extremely successful ACAS Code of Practice on Disciplinaries and Grievances).
Chris Hadrill, employment law solicitor at Redmans Solicitors, Richmond, stated today that “this is a significant step forward in the process of implementing settlement agreements this year. The Code of Practice will allow employers and employees to have more certainty as to their respective positions when they’re seeking to negotiate a settlement agreement and will seek to make negotiations as fair and even as possible, and will also allow settlement agreement lawyers to better advise their clients”.
London Compromise Agreement Solicitors
Latest posts by London Compromise Agreement Solicitors (see all)
- ACAS launches consultation on Settlement Agreement Code of Practice - February 19, 2013
