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Acas launches consultation on Settlement Agreements Code

Tuesday 12 February 2013

Acas has today launched a consultation on a new Code of Practice on Settlement Agreements.

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

The Government is introducing new legislation which will mean that any offers or discussions about settlement agreements cannot be used as evidence in an unfair dismissal claim unless either of the parties has engaged in some improper behaviour.

The Acas Code will come into effect alongside the new legislative provision to help everyone in the workplace understand how it will work in practice. The Code will also explain what constitutes improper behaviour.

Acas Council Chair Ed Sweeney said:

"This draft Code draws on our knowledge, expertise and experience in helping to resolve the thousands of workplace disputes every year.

"We hope it provides employers and employees with clear, straightforward guidance on how the new provisions on settlement agreements will work. We are very keen to hear what the public think of the draft code."

To support the Code, Acas is planning to produce non statutory guidance on settlement agreements which will provide more detail on the agreements and how they might be negotiated.

Further information and copies of the draft code can be obtained from the Acas consultations page of the Acas website and the deadline for comment is 9 April 2013.

Notes for editors

  1. The Department for Business Innovation and Skills (BIS) announced in September 2012 its intention to introduce a package of measures to facilitate the use of settlement agreements. The government is taking measures through the Enterprise and Regulatory Reform Bill to provide for the confidentiality of settlement negotiations in unfair dismissal claims. This measure will come into force, subject to Parliamentary process, by summer 2013. Acas was asked to produce a statutory Code of Practice on Settlement Agreements in support of this legislative change.
  2. In January 2013, BIS issued a response to the consultation on the principles to underpin the use of settlement agreements, in Ending the Employment Relationship: Government Response to Consultation. Visit GOV.UK - Consultation outcome Ending the employment relationship for further information.
  3. Settlement agreements are legally binding contracts which can be used to end the employment relationship on agreed terms. Their main feature is that they waive an individual's right to make a claim to a court or employment tribunal on the matters that are specifically covered in the agreement. They usually include some form of payment to the employee by the employer and may also include a reference.
  4. 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 employer, trade union and independent members.
  5. For media enquiries please contact Clare Carter/Shumon Rahman, PR and Media Manager (job share) on 0207 210 3688 or Lou Owen, Media and Marketing Officer on 0207 210 3920. For out of hours media enquires, contact the duty press officer on 07825 691093.