ACAS is consulting on the Code of Practice for Settlement Agreements, or “protected conversations” as they were originally proposed as.

Settlement agreements will be able to be offered by employers to end an individual’s employment, without the offer being able to be used as evidence should the employee pursue an unfair dismissal claim to an employment tribunal.

Provisions for introducing settlement agreements are contained in the Enterprise and Regulatory Reform Bill currently before Parliament.

The consultation, which ends on 9 April, asks what the code, and accompanying non-statutory guidance, should cover, including:

  • Whether the code should include statutory requirements such as putting the agreement in writing and that the employee should receive independent legal advice;
  • Whether the code should contain good practice guidance on how settlement agreements should be offered and discussed;
  • The wording of the template letters from employers making the offer of a settlement agreement;
  • Whether the template letters are included in the code or the non-statutory guidance;
  • Whether the code should include a minimum time period for considering a settlement agreement offer and how long that should be;
  • Whether the code should include a good practice recommendation that employees are allowed to be accompanied at meetings to discuss settlement agreements;
  • Whether there are additional examples of what constitutes improper behaviour and undue pressure (to those in the consultation) by an employer.

Victoria Phillips, head of employment rights at Thompsons said: “The government has sought to present settlement agreements as just a different name for compromise agreements, when the reality is they are a lever to get rid of perceived problem employees without bothering with due process.

“ACAS is suggesting a series of template letters in which the employee is told their boss has concerns about their performance or conduct or whatever and that they have a choice to attend a meeting with the employer to discuss this, or they can consider an offer to leave on agreed terms. The big risk is, if the employee is not told the detail of the concerns or what information the employer holds about them then they will be unable to assess risk and may feel pressurised to accept something that is not in their interest.”

Please visit the acas website to downloaded the consultation document