Changes to come: Settlement Agreements

The Government’s proposals for Settlement Agreements are due to come into force this Summer.

Under the proposals employers will potentially be able to negotiate settlements with employees pre-termination without fear of this being used in evidence against them in any unfair dismissal claims.  The exception to this is where the employer acts with impropriety – known as “improper behaviour”.  To assist employers a statutory Code of Practice is to be introduced with guidance on deciding and negotiating the level of financial settlement.

In the meantime, it is advisable for employers considering commencing any form of negotiations with employees prior to or after their dismissal to take legal advice to ensure that they are protected.