Settlement Agreements and Mandatory Early Conciliation

Employees who are considering settlement agreements instead of issuing proceedings should be aware of forthcoming changes.

From 6 April 2014 it is anticipated that potential claimants will be required to lodge details of their proposed employment tribunal claim with ACAS in the first instance.

ACAS will offer the parties the opportunity to engage in conciliation with a view to achieving a settlement within one calendar month. This window can be extended by up to two weeks with the consent of both parties and if Acas believes that there is a reasonable chance of settlement.

Where settlement is not achieved or the conciliation officer believes settlement is not possible, the Claimant will be issued with a certificate permitting them to issue proceedings in the employment tribunal. The legislation also extends the limitation periods for issuing a claim to allow early conciliation to take place. This will have the knock-on effect that cases which do not settle will take longer to get to tribunal.

The introduction of early conciliation is intended to encourage settlement at an early stage thus reducing the costs of the parties and the burden on the tribunal system. Employers also need to be aware of this change and should actively engage in the process as unreasonable refusal to explore a settlement may result in adverse cost being awarded against them.

Employees should be aware of this if offered a settlement agreement from now.

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