Concerns raised over ‘settlement agreement’ proposals

The Chartered Institute of Personnel and Development (CIPD) has raised concerns over Government proposals to introduce ‘settlement agreements’, designed to make it easier for employers to dismiss underperforming employees without fear of employment tribunals.

Mike Emmott, employee relations adviser at the CIPD, said:

“If the Government wishes to proceed with its proposals for settlement agreements, it should take clear steps to protect and promote good practice by requiring employers to have used proper performance management practices before offering a settlement agreement.

“In addition, we would propose instead of introducing a separate code on settlement agreements, to amend the Acas Code and guidance on disciplinary procedures to focus more clearly on promoting good practice in performance management. The consultation paper appears to rule this out.

“If settlement agreements become an excuse for not following basic good management practice – such as identifying performance issues and giving employees an opportunity to address them before moving to terminate their employment –employee engagement could well be undermined, to the detriment of productivity and competitiveness.”