As the Employment Bill passes through the House of Lords, the Government has come under pressure to remove the clause which would have allowed Compromise Agreements to use broad wording to settle a wide range of possible employee claims, rather than have to specify which particular complaints are being settled, as is the position at the moment.

The Government had hoped that relaxing the current rules (and following the format frequently used in ACAS settlement agreements) would go some way to helping its objective of making it easier to settle disputes in the workplace.

Concerns were raised in the House of Lords that this change would leave such agreements open to misuse, allowing employers to compromise all future claims by entering into this type of agreement. The Government does not agree that this would necessarily result, but has decided to drop the clause from the Employment Bill. Lord Sainsbury in his announcement on 30th April confirming the deletion of the clause from the Bill stated:

"Our reasons are twofold: first, although we continue to believe that any agreement that tends to compromise away an employee’s future rights would not be a valid agreement, we recognise that there is some degree of uncertainty and recent case law has done nothing to remove that uncertainty.

Secondly, and more importantly, we recognise the risk that although such an agreement would, in our view, be invalid, an employer may nonetheless attempt to persuade his employee to sign such an agreement. If that happened the fact that its legal validity was highly questionable would not alter the fact that having signed the agreement, the employee may then be deterred from going to the tribunal in the future in the belief that he no longer had the right to do so."

As a result, it looks as if we can no longer look forward to the day when compromise agreements become shorter as the common practice of listing all possible claims is dropped.

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