A package of measures aimed at reducing the number of workplace disputes that end up at Employment Tribunal were recently set out by Employment Relations Minister Jo Swinson.
The introduction and implementation of a new statutory code and guidance to encourage greater use of settlement agreements, along with setting a limit on unfair dismissal payments, are the next steps in the government’s response to the ‘Ending the Employment Relationship’ consultation.
“We are committed to finding ways to support both businesses and employees when a working relationship breaks down,” she said. “The measures I have announced today will do just that. 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.”
She continued: “Settlement agreements can be a helpful tool and work in the interest of both employer and employee. Creating a code and simple guidance will mean that these arrangements are more readily available to those in small businesses, not just large corporations. 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 £5,000. Tribunals should be the last resort not the first port of call.”
Settlement agreements will help resolve workplace disputes without the need to resort to an Employment Tribunal. The government will not be taking forward proposals to introduce a guideline tariff for settlement agreements, in response to concerns that it could set unrealistic expectations for employees or could be viewed by employers as a maximum from which they would try to negotiate down.