On 29 July 2013, new rules on Settlement Agreements and pre-termination negotations (also known as “protected conversations”) came into force.
Settlement Agreements replace Compromise Agreements and provide a way for employees and employers to agree to terminate an employment in a structured and certain way. Put very simply, the employee will sign away the right to bring an Employment Tribunal claim in exchange for a monetary or other settlement. The employee must take independent legal advice from a solicitor before signing the agreement (so they understand what they are signing away) and the employer will usually contribute to the cost of this.
So what has changed under the new rules? There have been a number of complex changes to the way that pre-termination negotiations should be handled, particularly in cases of unfair dismissal, along with a new ACAS Code of Practice on Settlement Agreements. We believe that the additional complexities will make little difference to the end result on a termination, but will probably make it harder to get to that result. As with any new legislation it will take time to bed down, and employers should be wary of making a costly mistake.
If you are an employer looking to dismiss a member of staff, or an employee who needs a Settlement Agreement signing, make sure you get the best advice available.
For plain speaking, friendly advice, contact us to speak to a specialist employment solicitor today:
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Or simply use the Contact Us form on our website.