How can the use of settlement agreements be facilitated?

Settlement agreements are consensual, legally binding documents which can be used to end an employment relationship. Typically, an employee will receive a severance payment, and perhaps a reference, in return for waiving their right to take a case to an employment tribunal on any grounds covered by the settlement agreement. The Government believes that settlement agreements can be a valuable way of resolving disputes without having to resort to an employment tribunal. They can be of benefit to employers (who gain certainty they won’t face a tribunal case on any of the grounds covered by the agreement) and the individual (who gets a payment and avoids a dismissal in their employment history).

The proposals make offers of settlement inadmissible in unfair dismissal claims, and propose a statutory code to underpin its use. ACAS will produce the Code once the principles which should underpin it are agreed. The consultation includes examples of the types of improper behaviour that should not be protected by legislation e.g. discriminatory behaviour, undue pressure to accept an offer etc.

The Government suggests that template letters and model agreements will help reduce business uncertainty about how to go about offering settlement in the right way. They can reduce the amount of time and legal resource required to achieve a consensual end to the employment relationship.

Our thoughts?

We are seeing more early settlement of disputes through the existing compromise agreement arrangements and in many cases this is a good outcome for both the employer and employee. We have some reservations about template documents as one size doesn’t fit all situations or sectors. Douglas Tonks’ clients know just how important we view effective performance management to be and encourage mediation as an alternative solution.

The winning ticket number is 1968, if you have won congratulations and please get in touch so that we can send you the bottle of Aberfeldy Scotch.

If this is not your number sorry but we hope you enjoyed the chocolate and meeting us.

Please have a good look around our website and get in touch.

We have had a fantastic response to our chocolate money, we handed out over 6000 coins over the two days.

We will be announcing the winning ticket number on Friday after the conference is over, please check back tomorrow.

Stand 137

March 21/22, 2012 at the Royal Armouries, Leeds.