New legislation enabling confidential pre-termination settlement agreements, contained in the new s111A of the Employment Rights Act 1996, is expected to come into force during the summer.
In broad terms, employers and employees will be allowed to enter into certain confidential discussions about termination of employment, which will be inadmissible in ordinary unfair dismissal claims. It's a bit similar to - but has very important differences from - the 'without prejudice' rule.
Acas has produced its statutory Code of Practice on Settlement Agreements (scroll to the end of the consultation document, to which that link goes). It contains a number of important differences from the draft version, including:-
- omitting the requirement that the initial termination settlement offer must be in writing
- omitting the template letters (but moving them to non-statutory guidance)
- adding a requirement that an employee must have a minimum of 10 calendar days to consider any offer
- adding an expectation that employees should be allowed to be accompanied at settlement meetings
Settlement Agreements are an important - and a very technical - development in employment law and HR relations which employers and employees need to understand. I'll be covering them as the very first topic on the day during my Employment Law MasterClass.