Clear as mud: what’s the point of compromise agreements becoming settlement agreements?

Pattinson & Brewer employment specialist Paul Statham considers the Government’s latest ‘tweakings’ to employment tribunal rules. And wonders whether they will do little more than muddy the waters still further…

The Government yesterday published the second commencement Order for the Enterprise and Regulatory Reform Act 2013. This brings Section 14 and 23 of the Act in to force on the 29 July.

Section 14 is the provision about the confidentiality of negotiations before termination of employment, which allow employers to have pre-termination negotiation meetings with employees which cannot then be referred to in subsequent Employment Tribunal proceedings (for my thoughts on how employees can deal with employers who suggest such meetings, see tinyurl.com/oupuhtl.)

We are promised some non-statutory guidance from ACAS on the conduct of such meetings and what will constitute ‘improper behaviour’. It should be remembered that pre-termination negotiations are not inadmissible if a subsequent tribunal claim is one where the complainant is regarded as unfairly dismissed automatically – namely discrimination cases, dismissal for trade union membership or activities, assertion of a statutory right, etc.

I anticipate that if the pre-termination negotiations do not result in a settlement and tribunal proceedings follow, there is going to be a lot of satellite litigation about whether what was said in those meetings is covered by the principles of confidentiality set out in Section 14 or normal ‘without prejudice’ principles, or is admissible.

Section 23 means that in all provisions of employment legislation where reference is made to compromise agreements, compromise contracts and compromises from the 29 July, they will have to be re-named ‘settlement agreements’ etc. The Government thought that this was a more appropriate term, and that people were put off entering into agreements because of the reference to ‘compromise’.

My personal view is that it will make no difference, and that if people want to enter in to agreements to settle disputes, they will do so whatever the title on the front of the agreement.

I am old enough to remember when Windscale was re-named Sellafield. It made little difference to the toxic nature of the processes carried out there.