There are times when dealing with employee issues can become:
These are the times when coming to an agreement with an employee and paying to resolve the matter are often the best ways to remove stress, risk and difficulty.
I understand that it can be a bitter pill to swallow in some cases but actually paying the employee a sum of money to walk away and not pursue matters further can often be the best outcome for your business and sanity!
Fortunately for employers there are a few ways in which you can legitimately explore settlement options without the risk that it will come back to haunt you later on.
The general legal position is that attempts to genuinely settle a dispute can take place ‘off the record’ and without one party referring to them later on as ‘evidence’ of the others ‘guilt’.
This is helpful for employers where there is already a dispute to settle, for example, if an employee raises a grievance about treatment at work, or they are in the middle of disciplinary proceedings it is certainly arguable that settlement discussions would be covered by the general ‘Without Prejudice’ rules.
The ‘Without Prejudice’ principle means that if you are attempting to resolve a genuine existing legal dispute then the discussions can only be referred to in the Court or Employment Tribunal when it comes to the question of costs, after the case has been decided. This is why you will often see them headed as ‘Without Prejudice Save As To Costs’.
It means that if the winning party has made a settlement offer earlier on in the proceedings which was rejected they can bring the settlement offer to the attention of the Court or Employment Tribunal and argue that they should have their costs paid from the time at which they made the settlement offer. This is more relevant in proceedings in the Courts but can still be referred to in disputes in the Employment Tribunal.
In 2013 the law changed with the introduction of ‘Protected Conversations’. The idea being that employers should be able to have conversations with employees to try to resolve issues before they turn into actual disputes.
Prior to the change Employers would often avoid having discussions with employees whilst they were still employed for fear that the conversation could be used against them if, for example, they took steps to discipline or dismiss an employee later on.
Now employers can have a protected conversation and provided they follow certain guidelines (set out below) the conversation cannot be referred to in any subsequent claim for unfair dismissal.
Please note that the rules regarding protected conversations only apply to Unfair Dismissal claims and not to any other claim, such as Discrimination. Employers would have to rely on the general ‘Without Prejudice’ principles (described above).
It is also important to note that any ‘improper behaviour’ in the course of the discussions can still be referred to in any later Employment Tribunal proceedings. Therefore, it is important to behave fairly in the discussions, be prepared and stick to the key points, ensuring that you make it clear that the employees decision on the offer will not impact on any decision or action taken later.
The employee should know that they are free to consider the offer and reject it if they wish with no impact or effect upon them.
The process I recommend that you follow during a ‘Protected Conversation’ is as follows:
Employees can only legitimately settle their employment claims and waive their employment rights by agreeing settlement via ACAS (known as a COT3) or in the form of a Settlement Agreement.
The law recognises that employees are generally in a weaker bargaining position than employers and to prevent employees being taken advantage of and agreeing to waive their rights without being compensated fairly, Settlement Agreement’s must contain certain provisions and employees must obtain independent advice on the content.
Employers should take care to ensure that if they offer an employee a Settlement Agreement or settlement payment the Agreement is genuinely legally binding and contains sufficient protection for the employer otherwise you could be wasting your money.
Typical clauses in a Settlement Agreement include:
Up until July 2013 Settlement Agreements were known as Compromise Agreements, they were renamed to make it easier for parties to understand their purpose.
If you would like any advice or assistance with resolving employee disputes or offering a Settlement Agreement then please get in touch. We can often provide you with a fixed fee quote for the preparation of a Settlement Agreement and relevant guidance to assist you, thereby keeping your costs under control.
You can contact us at our offices in Eastleigh, Salisbury or the Isle of Wight or we can assist you wherever you are in the UK.
01983 897003, 023 8098 2006 or 01722 653001
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