Acas launches consultation on settlement agreements code of practice

Acas has launched a consultation on a statutory code of practice to accompany the forthcoming legislation on settlement agreements, which makes pre-termination negotiations inadmissible in unfair dismissal complaints. 

The Enterprise and Regulatory Reform Bill renames "compromise agreements" as "settlement agreements" and introduces a provision into the Employment Rights Act 1996 whereby discussions between an employer and employee with a view to terminating employment on agreed terms are confidential. Employees will be unable to use evidence of such negotiations in unfair dismissal complaints and, where the parties reach a settlement, the employee will be unable to bring a tribunal claim under the jurisdictions listed in the agreement. 

The draft code of practice on settlement agreements sets out the broad principles covering the use of settlement agreements. It will be accompanied by non-statutory guidance. Acas invites views on the draft code:

  • The draft code covers elements of good practice relating to offers and negotiation of settlement agreements, for example that the initial offer should be made in writing and that employees should have the option to be accompanied at meetings discussing settlement. Acas seeks views on this guidance, including whether it should be in the code or the non-statutory guidance. 
  • The draft code includes non-compulsory template letters. Acas asks if these should be included in the code or the non-statutory guidance, and seeks views on the wording of the letters. 
  • The draft code provides that employees should be given a reasonable period of time to consider an offer of settlement and that this should be a minimum of seven working days. Acas consults on whether or not the code should include a minimum period of time for considering settlement offers. 
  • Where there is improper behaviour in relation to a settlement agreement, confidentiality will not apply. The draft code gives guidance on what constitutes improper behaviour when negotiating such agreements, and Acas seeks views on this guidance. 

The consultation closes on 9 April 2013. Acas confirms that the new legislation and accompanying code should be brought into force by the summer of 2013. 

Also

Government publishes response to consultation on ending the employment relationship Read XpertHR's summary of the Government's response to the consultation on "Ending the employment relationship", which sought views on, among other things, various measures to facilitate the use of settlement agreements and the introduction of a reduced cap on the compensatory award for unfair dismissal. 

The XpertHR policies and documents service includes a model compromise agreement, which employers can use on the termination of employment to prevent an employee from issuing proceedings in relation to infringement of his or her statutory employment rights. 

How to compromise employment disputes This step-by-step guide considers how employment disputes can be effectively and legally compromised.