New guidance on settlement agreements from Acas

Workplace expert, Acas, published new guidance to accompany the introduction of its new Code of Practice on Settlement Agreements.

Settlement agreements are legally binding contracts which can be used to end an employment relationship on agreed terms, and the new guidance is designed to help employers and employees understand when to use settlement agreements and how they can be negotiated.

It has been revealed that the guidance also includes checklists for employers and employees, a model agreement, template “offer” letters, and some examples of how settlement agreements might be used.

In addition, it includes examples of what could constitute improper behaviour by either an employers or employee when discussing and using settlement agreements.

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Commenting, Ed Sweeney, Acas Chair, said:

“The new guidance, which has been approved by the Acas Council, is designed to provide practical and straightforward advice on the use of settlement agreements.”

“Settlement agreements are one tool that can be used to deal with workplace problems. They can be used to facilitate the end of an employment relationship where both parties agree to the use of one.”