mediationACAS has published its response to the consultation on its settlement agreements code of practice, which contains the final version of the Code of Settlement Agreements.

The next step will be for the Code to be put before Parliament so it can be brought into effect on a date to yet to be confirmed by Ministers; however the Government has already indicated its intention to bring the new Code and the new provisions on settlement agreements into effect by the summer of 2013.

The key points include:

  • The Code outlines what is meant by without prejudice.
  • The Code concentrates on the significance of section 111A of the Employment Rights Act 1996, which introduces confidentiality provisions associated with negotiations that take place to reach such agreements (commonly referred to as Protected Conversations or pre-termination negotiations).
  • Protected Conversations can be treated as confidential even where there is no current employment dispute.
  • Protected Conversations only extend to normal unfair dismissal claims (express and constructive) but not to automatic unfair dismissal claims, for example where the dismissal is because of whistleblowing or union membership or asserting a statutory right.
  • Protection does not extend to other claims such as discrimination.
  • Confidentiality can be lost if there’s ‘improper conduct’. In other words the conversation / communication would become admissible in an unfair dismissal Employment Tribunal hearing.
  • The initial discussion / offer can be oral (and does not have to be in writing).
  • A meeting may take place to discuss the offer (note there is no requirement for a meeting, as the offer could be put in writing only).
  • Whilst not a legal requirement, the Code says ’employers should allow employees to be accompanied at the meeting by a work colleague, trade union official or trade union representative’.
  • An employee must be given a reasonable period of time to consider the proposed settlement agreement.  As a general rule, a minimum period of ten calendar days should be allowed to consider the proposed formal written terms of a settlement agreement and to receive independent advice, unless the parties agree otherwise (paragraph 12 of the Code).
  • Guidance on what constitutes improper behaviour is contained in paragraphs 17 and 18 of the Settlement Agreement Code.

This publication of the revised final version of the code follows an Acas consultation, which ran from 12 February to 9 April 2013.