Settlement agreements and pre-termination negotiations advice

David Reid
25th Jul 2013

From 29 July 2013 there will changes in employment law concerning settlement agreements and pre-termination agreements. Here is our advice.

Employment law news


‘Compromise agreements’ will be renamed ‘settlement agreements’. Pre-termination negotiations leading up to the signing of settlement agreements will also be introduced as a new concept on 29 July 2013.


Employers should note that evidence arising from pre-termination negotiations will only be inadmissible in respect of ordinary unfair dismissal claims. This means that the evidence will continue to be admissible in respect of other claims, such as discrimination, automatically unfair dismissal and breach of contract.


In addition, if anything is said or done during the pre-termination negotiations which in an employment tribunal’s opinion is improper, or is connected with improper behaviour, evidence will only be inadmissible in an unfair dismissal claim to the extent that the tribunal considers fair in the circumstances. Improper behaviour is not specifically defined but is likely to include anything which could be construed as bullying, harassment, or intimidating behaviour, such as the use of aggressive language, or putting undue pressure on a party by issuing them an ultimatum to sign the agreement or lose their job anyway.


In view of the above, whilst the new provisions appear to give employers more flexibility, there are a myriad of issues which will need to be considered before entering into such discussions. There is also guidance from ACAS outlining various procedural hoops to jump through, such as allowing the employee at least 10 days to consider the offer.

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