Definition of "independent adviser" for compromise agreements clarified
The Government has published an order amending s.147 of the Equality Act 2010. The amendment confirms that an employee's representative can be an “independent adviser” for the purpose of a compromise agreement.
Under the Equality Act 2010, the parties to a dispute may settle a complaint of discrimination, harassment or victimisation by way of a compromise agreement (referred to as a “qualifying compromise contract” under the Act). Section 147 of the Act sets out the conditions for a valid compromise agreement. One of the conditions is that the employee must have received advice from an independent adviser about the terms and effect of the agreement before entering into it. The purpose of this is to ensure that the employee obtains independent advice regarding his or her potential claims before agreeing not to pursue them before an employment tribunal.
However, uncertainty has arisen in relation to the definition of "independent adviser" under s.147 of the Act. Section 147(5), which aims to ensure that the employee is advised by a person who is genuinely independent, provides that an independent adviser cannot be a person who is acting for a party to the contract or complaint. This appears to exclude a person acting on behalf of the employee to represent his or her interests, including a qualified lawyer, from being an independent adviser.
The Equality Act 2010 (Amendment) Order 2012 (SI 2012/334), which comes into force on 6 April 2012, amends the Equality Act 2010 to clarify the definition of "independent adviser". It confirms that a person who acts for an employee in relation to the contract or complaint can be an independent adviser for the purpose of the compromise agreement.
- Equality Act 2010 (Amendment) Order 2012 The full text of the order can be viewed on the UK legislation website.
- Equality Act 2010 Section 147 of the Equality Act 2010 can also be viewed on the UK legislation website.
XpertHR's legal timetable provides summaries of forthcoming and recently implemented legislation.
Compromising employment disputes: a guide This XpertHR "how to" guide provides practical and legal advice for employers on using compromise agreements.
XpertHR model compromise agreement This model compromise agreement can be used when an employer wishes to prevent an employee from issuing proceedings in relation to infringement of his or her statutory employment rights.