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Proposed Reforms to Employment Tribunals

 14th Sep 2012

The Business Secretary, Vince Cable, has today announced the start of consultation into proposed changes to Employment Tribunals.  News coverage has predominantly focussed 2 things:

  • reducing the statutory cap on compensation
  • the introduction of “settlement agreements”

The BBC website describes a settlement agreement as a document “in which staff agree to leave without being able to go to a tribunal, but get a pay-off in return.”  This may sound familiar to employers and employees alike, who are already familiar with the compromise agreement, a mainstay of employment for many years.

What is actually being proposed is the relaxation of “without prejudice” discussions in straightforward dismissals to enable employers to negotiate settlement agreements, without a Tribunal being told of those negotiations.  Under the proposals, negotiations that stray into discrimination will still be admissible, as is the case now.

The proposal is intended to give employers a little more peace of mind where they want to sit the employee down and give them a choice between a dignified departure and a possibly lengthy performance improvement programme.

Contact us for more information on how the proposed changes could affect you.

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