New guidance on settlement agreements from Acas

Workplace expert Acas has today published new guidance to accompany the introduction of its new Code of Practice on Settlement Agreements which comes into force today.

Settlement agreements are legally binding contracts which can be used to end an employment relationship on agreed terms.

The new guidance is designed to help employers and employees understand when to use settlement agreements and how they can be negotiated.

The guidance includes checklists for employers and employees, a model agreement, template "offer" letters, and some examples of how settlement agreements might be used.

It also includes examples of what could constitute improper behaviour by either an employer or employee when discussing and using settlement agreements.

Ed Sweeney, Acas Chair, said:

"The new guidance, which has been approved by the Acas Council, is designed to provide practical and straightforward advice on the use of settlement agreements.

"Settlement agreements are one tool that can be used to deal with workplace problems. They can be used to facilitate the end of an employment relationship where both parties agree to the use of one."

The guidance booklet, Settlement Agreements: a guide, and further information about the Code of Practice is available to download at

The Acas Code on Settlement Agreements is taken into account by employment tribunals when considering relevant cases.

Notes to Editors

  1. Acas' aim is to improve organisations and working life through better employment relations. It provides information, advice, training and a range of services working with employers and employees to prevent or resolve problems and improve performance. It is an independent statutory body governed by a Council consisting of the Acas Chair and members from business, trade unions, academia and the law.
  2. The independent report 'Type=Media;Mediaid=3731;Style=;' was carried out by TNS BMRB between 21 November 2012 and 8 February 2013. A total of 476 people took part in the survey.
  3. The independent report 'Type=Media;Mediaid=3724;Style=;' was carried out by TNS BMRB with Individual Conciliation cases cleared between July and October 2012. 2625 people took part in the survey.
  4. The independent report 'Type=Media;Mediaid=3719;Style=;' (ECSO) was carried out by TNS BMRB between 21 November 2012 and 8 February 2013. A total of 783 people took part in the survey. The pilot covered three Acas offices: Cardiff, Glasgow and London. A team of ECSOs were recruited from the Acas helpline and the team was operational over a four month period starting in June 2012 based in the Newcastle office. During that period, helpline advisers referred all PCC referrals for Cardiff, Glasgow and London to ECSOs in Newcastle. These offices were designated the 'experiment' group. The referrals for three other Acas offices: Bristol, Newcastle and the North West, served as a 'control' group, with PCC operating in line with the standard model. The three control offices were chosen as the closest comparison to the experiment offices in terms of size, way of working, and numbers and types of PCC referrals.
  5. For media enquires please contact Clare Carter/Shumon Rahman PR and Media Manager (job share) on 020 7210 3688 or Lou Owen on 020 7210 3920. For out of hours media enquiries call 07825 691093.