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Business groups welcome ‘settlement agreements’ for dismissals


Business and employer groups have welcomed Government plans to introduce ‘settlement agreements’ to help firms remove under-performing staff.


Under the plans, settlement agreements would enable employers to encourage workers to leave in return for an agreed pay-off.


The agreements are designed to act as an alternative to a potentially costly and lengthy tribunal, although employees would be able to reject the offer of a settlement agreement and proceed to a tribunal if they wish.


It is hoped the plans will offer businesses greater flexibility and quicker resolution for workplace disputes.


The British Chambers of Commerce (BCC) welcomed the proposals, claiming that they would bring greater certainty to employers.


BCC director of policy, Dr Adam Marshall, said: ‘The proposal to beef up settlement agreements will offer many employers the certainty and security they crave. That is provided that any offer made to end a contractual relationship with an employee cannot be used against them in employment tribunal proceedings.


‘Settlement agreements, and the legal safeguards for business proposed alongside them, will help to deliver that confidence.’


Meanwhile Steve Radley, director of policy at the manufacturers' association the EEF, commented: ‘Making it easier for employers to reach settlement agreements will be another step forward in helping them manage change in the workplace and focus on growing their businesses.


‘In particular, we welcome efforts to provide employers with a safe space to discuss performance issues with their staff without the fear of trigger legal action’.