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Settlement agreements for employment disputes

by Brian Sims

Following recent ‘Ending the Employment Relationship’ consultation, the Government’s response has highlighted the introduction and implementation of a statutory code and guidance to encourage more prolific utilisation of settlement agreements. This coincides with proposed limits to unfair dismissal payments. The proposals include a 12 month pay-cap on compensation for unfair dismissal, as well as greater availability of template letters to encourage settlement agreements, along with a statutory code of practice with guidance as to what constitutes improper behaviour. However, there will not be a prescribed tariff for settlement agreements. Instead, guidance will highlight issues that should be considered when deciding financial settlements. Jo Swinson (pictured), MP for East Dunbartonshire, stated, ‘We are committed to finding ways to support both businesses and employees when a working relationship breaks down. Central to this is promoting the benefits of good communication, better management, and early dispute resolution, as this can lead to the best outcomes for everyone. We are working closely with Acas to get the rules and procedures for Early Conciliation right, and welcome the views of interested parties in our consultation. ‘Employment Tribunals are costly for everyone, in terms of money but also time and stress. We need to tackle unrealistic expectations about the levels of compensation awards, especially when only 1 in 350 people who make a claim for unfair dismissal receive an award of more than their own salary, and the average award is less than

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