ACAS has welcomed the Government’s request for it to draft the new Code of Practice on Settlement Agreements. The Code will support the Government’s proposal that offers of settlement of workplace disputes will not generally be admissible as evidence in unfair dismissal claims.
The Government is seeking views, through consultation, on the content of the Statutory Code of Practice, which is intended to ‘give employers certainty that if they follow the approach outlined, they will be able to secure a settlement agreement and avoid tribunal claims’. The Government proposes that the Code is drafted so that it is clear that:
- settlement offers are inadmissible as evidence only in unfair dismissal claims;
- either party may propose settlement;
- employers need not have followed any particular procedure prior to offering settlement;
- settlement offers should be made in writing, clearly setting out the reason for the offer, what is being offered (e.g. settlement sum and, if appropriate, agreed reference) and the next steps if the offer is rejected;
- individuals should be given a clear, reasonable period of time to respond;
- no undue pressure should be put on a party to accept the offer of settlement;
- if an employer handles settlement in the wrong way (i.e. not as explained in the Code) this may breach the implied term of trust and confidence, allowing the employee to claim constructive dismissal;
- if a settlement offer is rejected, the employer must go through a fair process before a dismissal; and
- the approach should reflect current practice in without prejudice negotiations as closely as possible.
Paul Burton, Employment Solicitor, says "Get in touch if you need more information on this topic. You should find the other articles in October's employment newsletter of interest."
For a free initial meeting please call 01202 499255 and Kate or Paul will be happy to discuss any questions you may have.