Settlement agreements - making it
easier to sack staff?
The Government
wants to make it easier to sack staff. To be fair it wants to make it easier to
hire staff too. However, its consultation on ‘Ending the Employment
relationship’ has led to a number of proposals contained in the Enterprise and
Regulatory Reform Bill currently being considered by Parliament.
It’s proving
to be something of a headache as many of the proposed employment law changes due
to be implemented in April have been put back to later in the year.
In the summer
the Government proposes that compromise agreements will become settlement
agreements. Is this just a change of name? Not really because currently discussions
leading to the termination of an employee’s contract can only be held under the
privilege of ‘without prejudice’ if there is a ‘dispute’ that is being ‘compromised’.
Otherwise merely hinting that an employee should leave poses a risk to the
employer of an immediate claim for constructive dismissal!
A Settlement
Agreement does not require this. Therefore an employer will be free to approach
an employee and commence settlement conversations which will be confidential
and may not be referred to subsequently if they break down.
ACAS is
currently consulting on a draft statutory code of practice and supporting
documents, including template letters which include the line ‘you may wish to
consider the following offer to leave on agreed terms’. To be able to do this without any comeback
sounds great, but to look at the devil in the detail go to the ACAS website http://www.acas.org.uk/media/pdf/k/s/Acas-consultation-on-Draft-Code-of-Practice-on-Settlement-Agreements-February-2013.pdf
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