Compromise agreements are renamed Settlement agreements

On the 29thJuly 2013 Compromise Agreements are to be renamed Settlement Agreements, along with a raft of other employment law changes. It will also be possible for employers to enter into confidential pre-termination negotiations which will be inadmissible in any ordinary unfair dismissal proceedings unless there has been “improper behaviour”.

Be careful however, as the discussions may be potentially admissible in claims for automatic unfair dismissal, breach of contract or discrimination cases.

The Without Prejudice rule remains unchanged, which may provide some comfort to those already familiar with conducting termination discussions, but remember for this rule to apply there needs to be a pre-existing dispute.

Acas has published a Code of Practice on Settlement Agreements. The Code includes a list of what may amount to improper behaviour, for example bullying and harassment.

An employee must be given a reasonable period of time to consider any settlement proposals and the guidance provides that ten days should be allowed.

The content of the Settlement Agreement will be very similar to the existing Compromise Agreement, and the effects will be the same. You should seek advice as to amending any precedents to ensure compliance with legislation.

For further advice or assistance in relation to Settlement Agreements, please contact the employment team on 0113 320 5000 or email @email