Acas has published its response to consultation on settlement agreements used in discussions about ending employment. The response contains a revised version of the draft Code of Practice (the Code) on the process, which Ministers have approved. The Code accompanies a new S.111A of the Employment Rights Act 1996, to be introduced by S.14 of the Enterprise and Regulatory Reform Act 2013, whereby discussions between an employer and an employee with a view to terminating employment on agreed terms in ‘ordinary’ unfair dismissal circumstances (not automatically unfair dismissals or discrimination), are confidential and cannot be used as evidence in any future claim, unless a tribunal decides there has been some improper behaviour in relation to the settlement agreement discussions or offer, and then confidentiality will only apply to the extent the tribunal considers just.
The Code sets out the broad principles covering the use of settlement agreements and includes various examples of improper behavior. It contains a number of revisions to the original draft, including: (i) omitting the requirement that the initial termination settlement offer must be in writing; (ii) incorporating the template letters in non-statutory guidance rather than in the code; (iii) specifying a minimum time period of 10 days for considering a settlement agreement offer; and (iv) setting out that, while it is not a legal requirement, employers should allow employees to be accompanied by a work colleague, trade union official or trade union representative at a settlement discussion meeting.
This provides summary information and comment on the subject areas covered. Where employment tribunal and appellate court cases are reported, the information does not set out all of the facts, the legal arguments presented and the judgments made in every aspect of the case. Employment law is subject to constant change either by statute or by interpretation by the courts. While every care has been taken in compiling this information, we cannot be held responsible for any errors or omissions. Specialist legal advice must be taken on any legal issues that may arise before embarking upon any formal course of action.
