Hi there. It’s an exceptionally busy Emma Tice here.
I’m not sure about you, but things are crackers here! I like crackers though, it’s where I thrive. It does mean, however, that I’m going to keep this blog nice and short – I can hear you all breathe a sigh of relief.
Those who know me will know that when things are a bit busy at work I like to relax at home by taking on 53,724 additional projects in my spare time.
Amongst raising two children and a Rob, I’m currently organising the aftermath of our recent house move. Listen, I’ve definitely unpacked all the boxes and gotten everything in order but it’s time to start thinking beyond that and look towards the future – i.e. horses in my house (or outside, this is currently a debate between me and Rob. I quite like the idea of having a pony in the pantry or a stallion in the stairway).
This has resulted in me sending Rob out on a little treasure hunt over the last weekend to pick up all my little Vinted, Ebay and Facebook Marketplace finds. I’m really trying to keep costs as low as possible but this means poor Rob is knocking on random doors on a Saturday morning asking “are you the fella selling a rusty garden gate?” Again… poor Rob! It will all be worth it in the end though.
But enough about me. Let’s talk about the Employment Rights Bill. “Again?” I hear you ask. Well, yes. But only because there have been some further proposed changes.
If you are a regular attendee at our free webinars, you’ll have a good understanding of what’s currently in the Employment Rights Bill, we weave it in to most, if not all, of our webinars. Actually, let me use this as an opportunity to plug our upcoming session on 11th June 2025 at 10:00am all about making and managing redundancies where we’ll be picking up on this again. Register here:
Generally though, the Employment Rights Bill represents the biggest shake up of employment law and HR best practice in the last 15 years. The biggest headline (and there are lots of headlines in this Bill) is that it will remove the service requirement for unfair dismissal claims, which means employees will be able bring unfair dismissal claims from day one of employment (subject to a statutory probationary period which we have exactly diddly-squat details on).
If you want more information about the Bill then you can check out some of our past blogs here:
- https://precepthr.com/blog-more-updates-you-say-brace-yourself-for-the-latest-on-the-employment-rights-bill/
- https://precepthr.com/blog-fairweather-friends-important-updates-on-the-fair-work-agency/
- https://precepthr.com/major-updates-to-the-employment-rights-bill/
The Bill is currently working its way through the House of Lords – I won’t bore you with the legislative process, I’ll leave that to Rob and Philip because they are the politics nerds.
However, there has been another proposed amendment to the Bill, suggested by a Labour peer. This latest proposed amendment effects settlement agreements.
Settlement agreements when used effectively can be a powerful tool in the employer’s arsenal. They prevent Tribunal claims arising and can often save the time and cost of dealing with troublesome employees. Given we’re expecting a substantial rise in Employment Tribunal claims once the Employment Rights Bill comes into force – 15% by the government’s own estimates – settlement agreements are probably going to become even more important.
They shouldn’t, however, be used as a standard or frequent tool to resolve all disputes, otherwise you can get a bit of a reputation as an employer who pays people to go quietly. That can increase the number of troublesome employees and ultimately increase your costs as well.
For a settlement agreement to be legally binding, it has to meet certain legal requirements. So, for example – and to state the obvious a little bit – it has to be in writing, it has to refer to particular legal claims and the employee has to take independent legal advice from a “relevant adviser” on the terms and effects of the agreement. Currently, this can be a solicitor, a barrister, a certified trade union representative or a certified adviser working at an advice centre like the citizen’s advice bureau.
Labour peer Lord Pitkeathley (great name!) has proposed an amendment to the Employment Rights Bill that would allow independent HR consultants, certified by the CIPD, to advise and sign off settlement agreements on behalf of employees. This would hopefully ease the burden on the legal system and, let’s be frank, that is needed because it’s creaking at the knees as we speak. It’s hoped that the amendment would expand the pool of advisers and, hopefully, reduce costs associated with getting a settlement agreement signed off.
It has become common and expected practice for employers to make a contribution towards the legal fees that the employee incurs on taking advice from the relevant independent adviser. Years ago you would expect the standard fee to start from £250 plus VAT. Nowadays, that is incredibly uncommon and most solicitors will only pick up a settlement agreement for £500 plus VAT. A lot of the time now if we put anything below £500 plus VAT into a settlement agreement, the other side comes back citing the case of Solomon v University of Hertfordshire where the Employment Appeal Tribunal said this was likely to be the minimum contribution to cover a basic level of advice.
Remember though, that the contribution is only for advice on the terms and effects of the agreement. No way should we, as the employer, be contributing towards the costs of negotiating – why would we pay to negotiate with ourselves? No thanks! The employee is going to have to pick up those costs themselves.
This is all just something to bear in mind when you’re looking to offer settlement.
If you’re unsure or have any questions about settlement agreements then please, please, please pick up the phone. At Precept, we know what we’re talking about when it comes to these agreements and we can myth bust and de-jargon things for you.
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