Settlement Agreements: A Guide For UK Employers
Settlement Agreements: A Guide For UK Employers
One of the problems faced by HR managers is how you go about having a difficult conversation with an employee who isn’t performing as well as you would like and you want to have a conversation around the problem that could ultimately lead to a compromise agreement or a settlement agreement as they are now called.
There are rules about what conversations are without prejudice however they are incredibly grey and even lawyers find it difficult to be sure that any given conversation will be covered by that principle. Recognising this problem, last summer the Government set up a new initiative around settlement agreements (previously known as compromise agreements) and discussions leading to settlement agreements.
The basic premise is that any discussion designed to lead to the termination of the employment, with a compensatory package, usually an accompanying settlement agreement, will be protected from disclosure in front of any subsequent employment tribunals.
Obviously these sorts of discussions can be very damaging if the employee turns up at the employment tribunal and refers to them. It basically shows that the employer had it in for them all along or at least that’s what the employee will say and it’s likely that a judge may come to that conclusion.
Alleged employment discrimination and settlement agreements
The new initiative was generally welcomed and accepted by the HR community however there are, as always with new legislation, fundamental issues which we now need to overcome. The protection from immunity in the employment tribunal is lost if the employee alleges discrimination. So if for example, the employee says you are doing this as I am over 60, then that conversation can be referred to in a subsequent tribunal. Furthermore if an employer acts improperly in the way that they go about the discussions or the contents of the discussions, then again the protection will be lost. Obvious examples are if you bully or harass an employee within those discussions.
But as always it is a fine line and there will be lost of grey areas which will lead to a number of test cases.
Acas and Settlement Discussions
Acas has produced helpful guidance on settlement discussions however it runs to 85 pages. It does have some useful precedent template letters and it has some do’s and don’ts. However the reality is that we need a body of test cases which will allow us to really see how the judges in the employment tribunal are going to deal with this issue and what they will and won’t accept. Unfortunately this means that some employers are going to find themselves at the wrong end of the test case, but it is a necessary evil.
Ultimately whether or not these discussions are successful would depend on the level of compensation that is being offered. If that can be agreed, a settlement agreement will be signed and this matter will not require an employment tribunal.
If you would like to have a discussion on settlement discussions and agreements and employment law advice for employers or if you require some practical advice about how you should go about these settlement discussions, the letters that should go with them, the notes and minutes that should be kept, contact IBB’s highly experienced employment law solicitors and experts today by calling us on 01895 207892, or emailing your details to employment@ibblaw.co.uk.
IBB Employment Law Guides for Employers:
Redundancy Advice for EmployersAdvice on Employee Disputes and Tribunals for Employers
Mergers and Acquisitions Employment Advice for Employers
Find out how we can help you settle disputes and stay on the right side of the UK’s ever-changing employment law by calling one of employment law solicitors on 01895 207892, or email your details to employment@ibblaw.co.uk.
