Several important employment related changes take effect from 29 July.

The key points to note are:

  • The end of the Compromise Agreement: compromise agreements are being "rebadged" as settlement agreements because (interestingly) the Government believes this terminology is more conducive to negotiating an agreement. Template letters and a model agreement are expected to be published by the end of July, but these are not yet available.
  • Pre termination negotiations: A new provision is being introduced to allow for offers to end employment on agreed terms to be made on a confidential basis, so that the discussions are inadmissible in any subsequent claim for unfair dimsissal. There are, however, significant limitations in relying on this provision, for example the protection only applies to claims of unfair dismissal (not discrimination, breach of contract etc.) and we are concerned that this will lead to satellite litigation to determine whether the protection applies. In addition, ACAS Guidance states that employers should allow the employee a minimum of 10 calendar days to consider the settlement offer and take independent advice on any written offer, so the process is not as agile as employers may have liked. Also, confidentiality is lost for "improper behaviour" and this includes not providing reasonable time to consider any offer or otherwise putting undue pressure on the employee to sign up. Our view is that this should not stop employers using the broader protection afforded by the "without prejudice" rule (although this has its own limitations in that there must already be a dispute) as the standard approach.
  • Compensation limit changes: for dismissals where the termination date falls on or after 29 July 2013 , the new compensation limit of either a year's salary or £74, 200 (whichever is the lower) applies.
  • Employment Tribunal Fees: Fees to issue claims, and proceed to hearing will be introduced (for further information please click here for the Ministry of Justice fact sheet on fees)
  • Employment Tribunal Rules: New rules intended to sift out weaker claims at an early stage and introduce more robust case management take effect. We are concerned that the Tribunals do not have sufficient time/resource to ensure these objectives are fulfilled.

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.