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Settlement Agreements come into force 29 July 2013

July 10, 2013 10:17 am Published by Leave your thoughts

On 29 July 2013 new Settlement Agreements will replace Compromise Agreements. On the same date, confidentiality of pre-termination negotiations comes into force. This confidentiality element is important – but needs to be understood.

Acas have drafted a statutory Code of Practice. Ignore it at your peril. Although it is made clear that failure to follow the Code will not lead to proceedings, it also states that“employment tribunals will take the Code into account when considering relevant cases.” The Code contains some points that are a legal requirement and others that Acas considers good practice.

The confidentiality provisions run alongside, but should not be confused with, ‘without prejudice’ – there are differences. Even where there is no current dispute, or parties are unaware there is a problem, discussions remain confidential. However, parties should not believe this confidentiality provision leaves them bullet-proof.

Broadly, the confidentiality provision allows employers and employees to conduct confidentiality conversations about termination, which will be inadmissible in court in ordinary unfair dismissal claims. However, claims made which are automatically unfair, or apparently ordinarily unfair, may see all or part of the negotiations admissible if the ET considers there has been some “improper behaviour” such as bullying, harassment, victimisation, and putting undue pressure on a party.

We see this as being a good thing for employers. Inevitably, it provides ample opportunity for a small error to result in a big case. Employers must understand the process and requirements in detail. Of course, employees can also commence negotiations, but they will mostly be commenced by employers and this reduces the risk factor out of those discussions.

We are experts at dealing with difficult situations and negotiating exits. Clients appreciate our calm, collected approach.  If have a tense and difficult situation with an employee ring us for some business-like advice on 0845 463 3231.

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