Acas is consulting on a draft statutory code of practice to accompany the provisions on settlement agreements in the Enterprise and Regulatory Reform Bill, currently progressing through Parliament. The Bill renamescompromise agreements to 'settlement agreements' and provides that offers of settlement cannot be used as evidence in unfair dismissal cases (subject to certain exclusions), but only to the extent where a tribunal considers it just where there has been improper behaviour by either party in the process of negotiations. The 'Draft Acas Code of Practice on Settlement Agreements' is intended to provide a clear explanation of the law relating to this inadmissibility when negotiating settlement agreements. Acas will also produce detailed accompanying non-statutory guidance which will include expectations as to good practice in offering and negotiating settlement agreements. The consultation closes on 9 April 2013. Key points in the draft Code include:
• that initial offers of a settlement agreement should be set out in writing (draft letters are provided in Annexes 1 to 3 to cover incapability, misconduct and unsatisfactory attendance situations);
• that the parties should allow a reasonable amount of time for the offer of a settlement agreement to be considered with 7 working days being a minimum period;
• that employers should allow employees to be accompanied at a meeting to discuss settlement agreements by a work colleague, trade union official or trade union representative;
• examples of what might constitute 'improper behaviour' which include: harassment, physical assault, criminal or wrongful behavior, victimisation, discrimination and putting undue pressure on a party, such as not giving 7 days to consider the offer, reducing the financial value, threatening dismissal if the offer is rejected or an employee threatening to undermine an organisation’s public reputation.
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.
