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Settlement Agreements

EH SolicitorsBlogSettlement Agreements



Settlement Agreements



Settlement Agreements

What are they?

In the simplest terms?  Compromise agreements but with the red tape!

What is wrong with compromise agreements?

There were concerns about the following:

  • cost to both sides of drafting and agreeing a settlement
  • the complex and prescriptive wording of many agreements
  • employer unwillingness to suggest a compromise agreement at an early stage for fear of a constructive dismissal claim
  • the perception that using compromise agreements can foster a “claim culture” among the workforce
  • the perception that employees can be pressured into signing away their legal rights

What changes is the government planning as a result?

It plans to:

  • outline the issues that should be considered when deciding and negotiating the level of financial settlement
  • introduce a Statutory Code of Practice (“the Code”) and accompanying guidance on how to negotiate settlements and make best use of the new legislative provisions
  • provide a template agreement and suggested letters

What is the aim of the Code?

To help employers and employees negotiate settlement agreements by providing a clear explanation of the law as it relates to the confidentiality provisions of such negotiations.

When will the Code be available?

It’s currently open to consultation.  If you would like to review and comment, please click here for further details.  Consultation closes on 9 April 2013.  Once consultation has ended, ACAS will review and possibly revise the Code before a date is set for its introduction.


For further information or to discuss an employment law query, please telephone Ian Hass on 0845 838 1527 or email him at [email protected].

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