ACAS guide to settlement agreements
Labour & European Law Review Weekly Issue 332 14 August 2013
Following the introduction of settlement agreements at the end of last month, the conciliation service, Acas, has published new guidance to go with the Code of Practice that it produced.
Settlement agreements (formerly known as compromise agreements) are legally binding contracts which can be used to end an employment relationship on agreed terms. Acas says that the new guidance is designed to help employers and employees understand when to use the agreements and how they can be negotiated.
It includes checklists, a model agreement, template "offer" letters and some examples of how settlement agreements might be used, as well as examples of what could constitute ‘improper behaviour’ when discussing and using them. These include all forms of harassment and victimisation.
There is no statutory right for the employee to be accompanied at any meeting to discuss the agreement, but Acas recommends that employers should, as a matter of good practice, allow the employee to bring someone with them.
In its response to the consultation on settlement agreements, Thompsons made clear its concerns about the secrecy of pre-termination negotiations as well as their impact on employee rights.
Iain Birrell of Thompsons Solicitors said: “As there is no judicial guidance about what the offer from the employer should contain, it is possible that a derisory offer (and some negative words about their work), would be enough to cause some employees to leave anyway.
“Because of the secrecy of the arrangements, employees cannot claim constructive dismissal for resignations arising out of these meetings unless they can show the employer behaved improperly. Impropriety will become the new battleground in employment law”.