The Government has responded to Law Society calls for
clarification about the validity of compromise agreements drafted
under the Equality Act.
Compromise agreements are used extensively on termination
of employment, and usually provide for a severance payment by
an employer in return for which the employee agrees not to pursue
any claim before an employment tribunal.
Section 147 of the Equality Act 2010 set out the requirements
that must be satisfied to avoid employment tribunal claims through
compromise agreements. Crucially, it stipulated that employees must
receive advice from an 'independent adviser' about the terms of an
agreement.
Law Society President John Wotton commented: 'The wording of
this section casts doubt on whether a solicitor for the employee
could be recognised as an 'independent adviser' for the purposes of
preparing a compromise agreement. This could have rendered
unenforceable any discrimination-related elements of a compromise
agreement made following an employment dispute on which the
solicitor had up until that point given advice to the employee.
'Employers would not have been able to safely rely on these
agreements without the risk of challenge due to the ambiguity in
the legislation.'
The Equality Act 2010 (Amendment) Order 2012, which comes
into effect on 6 April, will amend section 147 by confirming that
an employee's lawyer can be an independent adviser for the purposes
of preparing a compromise agreement.
Ends
Notes to editors:
The Law Society is the independent professional body,
established for solicitors in 1825, that works globally to support
and represent its members, promoting the highest professional
standards and the rule of law.