Following on from Hannah’s blog on Adrian Beecroft’s proposals to introduce ‘no fault dismissals’ last week, Vince Cable gave a ‘categorical assurance’ during the second reading of the Enterprise and Regulatory Reform Bill last week that these proposals would not be taken forward.
However, proposals for ‘Settlement Agreements’ to replace the current ‘Compromise Agreements’ are to be taken forward. Aside from the obvious change to their name, the government’s intention appears to be to simplify the process, possibly by the introduction of standardised forms to replace the more complicated Agreements currently in circulation. More importantly, it is also proposed that an offer of a proposed Settlement Agreement will not be admissible in evidence if an aggrieved employee brings a Tribunal claim against their employee after turning such a proposal down. Employers should then be more comfortable making an offer of a financial settlement package without fear of that offer being raised in a Tribunal.
There is some commentary that these proposals won’t actually award significantly more protection to employers than the law currently provides by way of a ‘without prejudice’ conversation and also that their introduction could just lead to more litigation over what does or does not amount to a legitimate offer. However, it is often a big worry for employers that suggesting a Compromise Agreement in a genuine attempt to settle matters could result in an employer being faced with a constructive unfair dismissal claim from the employee who then feels ‘pushed out’ from the business and so any added protections for employers in this regard will likely receive an overall warm welcome!
In the meantime, raising performance issues or indeed any other sensitive issues with employees will remain a difficult and often potentially risky task for employers. To help assist employers in these situations, ACAS has recently provided guidance on ‘Challenging Conversations and how to manage them’, with helpful case studies and a step by step guide on conducting those difficult one-to-one conversations, whether these are with a view to ending the employment relationship or otherwise. These are worth a read and it goes without saying that Hannah and I are always happy to discuss the best way to deal with these situations further.
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