ACAS is consulting on a draft statutory code of practice to accompany the provisions on compromise agreements in the Enterprise and Regulatory Reform Bill, currently progressing through Parliament. As well as renaming such agreements ‘settlement agreements’, the Bill will provide that offers of settlement cannot be used as evidence in employment tribunals in unfair dismissal cases, so long as there has been no improper behaviour in the process of discussing the agreement.
Paul Burton, Employment Solicitor, says "The ‘Draft ACAS Code of Practice on Settlement Agreements’ is intended to provide a clear explanation of the law relating to this new form of inadmissibility when negotiating settlement agreements. The consultation closes on 9 April 2013."
Among other things, the Draft Code:
- states that initial offers of a settlement agreement should be set out in writing. ACAS recognises that the Government does not intend to suggest that failure to make an offer in writing would amount to ‘improper behaviour’ and seeks views on whether this, and other key points of good practice, should be included in the Code or accompanying guidance;
- makes clear that the parties should allow a reasonable amount of time for the offer of a settlement agreement to be considered and has set out 7 working days as a minimum period;
- states that employers should allow employees to be accompanied at a meeting to discuss settlement agreements by a work colleague, trade union official or trade union representative. Although employees have no legal right to be accompanied, ACAS believes that it can be helpful in such stressful meetings; and
- sets out some examples of what might constitute ‘improper behaviour’ and undue pressure that would usually result in the removal of legal protection surrounding the settlement offer e.g. intimidation or reducing a financial offer during the seven working days an employee has to consider the offer.
Get in touch if you need more information on this topic. You should find the other articles in March's employment newsletter of interest.
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