ACAS has published a revised final draft of the statutory "Code of Practice on Settlement Agreements" which accompanies the new provisions making pre-termination settlement negotiations inadmissible in ordinary unfair dismissal proceedings, unless there has been improper behaviour by one of the parties. These provisions will run alongside the existing "without prejudice" rule.
The final version of the Code includes various changes arising from comments received in the recent consultation process:
- The recommendation for initial settlement offers to be in writing has been removed but the final agreement must still be in writing.
- Template settlement offer letters will be included in non-statutory guidance rather than the statutory Code.
- The minimum recommended period for considering offers has been increased from 7 to 10 days, but the parties can agree on a different time limit.
- The Code includes a recommendation that employees should be accompanied at settlement agreement discussions by a work colleague or trade union representative, but this is not a legal entitlement.
- The examples of "improper behaviour" which will result in the negotiations being admissible have been expanded.
Additional non-statutory guidance will be provided by ACAS on settlement agreements. This will cover best practice, template offer letters and a model settlement agreement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
