Jane Fielding: Good morning everyone. I am Jane Fielding and I am head of the employment, labour and equalities team here at Gowling WLG in the UK and I am delighted to welcome you to this, the third of our annual webinar series.
Unfortunately we had to cancel Tuesday's webinar due to a bereavement in the team and I was not able to deliver that webinar but we will be rescheduling it for later in the month so do please look out for that.
So today's topic is settlement agreements on exit and those can obviously be a very useful tool to achieve a clean break with the employee exiting with agreed terms and everybody knows where they stand. But as employers they are almost always the party that drafts the settlement agreement, it can be a little bit of an own goal if you get something wrong in the drafting.
So we thought it would be timely to give you some tips on common pitfalls that we see in the settlement agreements that come across our desk and to give you a bit of a refresher on what not to do and what to get right.
So our speaker today is Jasmine Coyne. She is an associate in the team and she has a broad practice but a part of her daily diet, I would say probably, is helping employers navigate settlement agreements and getting them signed off to protect the organisation. So Jasmine is going to talk for 30 minutes or so.
As usual we will leave some time at the end for questions. If you want to ask a question then please can you use the Q&A function, you will find it, as you probably all know by now, in the bottom middle of your Zoom screen. If you could please leave your name because if we do not get to all the questions, we do commit to come back to you separately by email afterwards, and obviously if you ask anonymously we will not be able to do that.
If you have got any technical issues as the webinar goes along, hopefully you will not, but if you do again please use the Q&A function and Lucy Strong who is helping us behind the scenes to make this all work, will come back to you and try and sort it out for you. And at the end we will circulate a questionnaire by email, I will flag it again before we finish but if you could take a couple of minutes just to fill that in and send it back to us, we would really appreciate it. We do use your feedback to help work out what to do in future sessions to make sure we are covering topics of interest to you.
So I will turn my camera and microphone off and handover to Jasmine.
Jasmine Coyne: Thanks Jane. Welcome everyone to today's webinar. It is often easy I think when preparing settlement agreements just to dig out the last one that you did and start from there and not properly consider the contents of the agreement itself, so the goal for today really is to highlight areas of and issues with settlement agreements that we might overlook.
So just starting in terms of a broad overview of what I want to talk about today, I want to talk about the limitations of settlement agreements and the sorts of claims that cannot be waived, particularly in light of recent case law and with this in mind how employers can manage their risk and I expect that will take the majority of the time today, but I also want to touch on how to provide effect consideration for the other obligations set out in the agreement. We will go on to discuss confidentiality clauses and their limits. I will run through the tax treatment of termination payments and particularly those payments that do not appear in every agreement and to wrap it up we will run through some practical tips for issues surrounding settlement discussions.
So as Jane said really, after employment contracts, settlement agreements are one of the most common contracts that come across our desks and probably yours too when dealing with employees and they can be entered into at any stage of the employment relationship, but most commonly we will see them on exit and really we are using them because employers are looking to tidy up what has gone before in the employment relationship and on the case of an exit to have a clean break from that particular employee with no repercussions from their employment.
There are however limits to settlement agreements and as a reminder there are some claims that cannot be waived and I have put a few on the slide here, but I should say not an exhaustive list. So settlement agreements cannot be used to waive statutory payments such as maternity, paternity, adoption pay or shared parental pay and we have the case of Campus Living Villages which gives us some helpful guidance in this area.
So this was a case that came before the Tax Tribunal rather than the Employment Tribunal and involved an employee who was dismissed by reason of redundancy while she was pregnant. She later brought a claim for unfair dismissal and pregnancy discrimination which was compromised by way of a COT3 agreement, so in other words settled by ACAS rather than under a regular settlement agreement, but the employer agreed to pay £60,000 in full and final settlement of all the claims arising from contract and also an injury to feelings payment of £20,000. But on review the Tax Tribunal found that the Social Security and Benefits Act provides an absolute right to statutory maternity pay, so any agreement which purports to contract out of that right is void.
So if you are in a situation where you are looking to settle claims with an employee that had a right to a statutory payment like maternity pay or paternity pay it is really important that you make sure that entitlement is clearly specified and accounted for in the settlement terms.
Another hot topic is data protection and we get asked whether employers can settle or use settlement agreements to ask the individual to waive their rights under data protection legislation, but the Data Protection Act contains no specific provisions that permits individuals to contract out of their rights under the Act. So including a provision on the part of the employee not to make a future Data Subject Access Request, whilst a provision like that might deter the individual from making a future DSAR, given the lack of a relevant exemption in the legislation, a provision like that is likely to be unenforceable so if the employer sought to rely on the terms of the settlement agreement by not responding to the DSAR, they would likely be in breach of their data protection obligations.
So do make sure if you do plan to use or include a provision like this in your settlement agreements you only include them on the basis that that limitation is understood.
We also get asked in relation to data protection whether we can require the employee to withdraw an existing DSAR under the terms of the settlement agreement, because it is relatively common for a DSAR to be made by an employee or a former employee in the context of a workplace dispute, whether that is to flush out relevant evidence or just to put pressure on the employer and in this context I think a clause requiring the employee to withdraw or not pursue an existing DSAR is likely to be acceptable because, particularly in circumstances where the individual is receiving independent legal advice on the terms and the effects of the agreement.
The next two bullet points on the slide I just want to highlight are bought in to settle any failure to inform and consult claims either because the obligation arose in a collective redundancy situation or in the event of a TUPE transfer would also be void if settled under a settlement agreement because these are claims that can only be settled by ACAS conciliation and reaching agreement under a COT3.
So what we have touched upon so far has been the status quo for quite a while, so hopefully should just be a refresher really rather than shifting the way you look at settlement agreements altogether, but the last point on this slide, future claims, is relatively new and we will take a look at that in more detail on the next slide.
So Section 147 of the Equality Act which allows employment discrimination claims to be compromised by way of a settlement agreement requires, amongst other things, that a valid settlement agreement must be in writing and must relate to the particular complaint and there has been a lot of debate over the years about the meaning of "must relate to the particular complaint" and the ability to settle potential future claims.
In October 2022, this issue came before the Employment Appeals Tribunal sitting in Scotland and as a reminder the EAT in Scotland is binding on Tribunals in England Wales as well and appeared in the case of Bathgate the EAT in Scotland held that "relates to the particular complaint" does not allow for settlement of a future claim unknown to the employee at the time the agreement was concluded, because the EAT considered that Parliament's intention when acting Section 147 of the Equality Act was that it should only be available in respect of complaints that have already arisen between the parties.
So in other words, settlement can only be of either an existing actual complaint or where the grounds of complaint existed when settling and you might ask where does that leave employers who want peace of mind and certainty about future claims?
I think there has been a longstanding practice when drafting settlement agreements to draft them in wide terms to catch all possible future claims as well but the impact of the Bathgate judgment is that general waivers will not work for future claims. As a matter of practice at Gowling we have decided not to change our precedent settlement agreement at this stage because our current drafting tries to highlight and mitigate the risk of future claims in a number of ways which you might also consider adopting.
So for example we split out the claims into two categories; the first category being claims that have actually been asserted by the employee or are likely to exist from the facts of the situation; and then a second category of other claims that could exist given the wider circumstances of the employee and we recommend that when listing the waivers in your settlement agreement, you only include those waivers that could potentially exist for that employee, so we would recommend deleting anything, for example to do with part time working, if the employee you are dealing with has always worked full time and after we split out the waivers into categories, we then back up the categorisation of waivers in a warranty clause as well.
We do still take the approach of including wording about settling future claims in the agreements but in practice really if we are settling with an existing employee who has brought a claim but is not leaving the business it is not really reasonable to settle future claims anyway and if the employee is leaving, the potential for future claims is generally very limited anyway and keep in mind it is worth including the wording on future claims in your agreement, just for deterrent effect if nothing else.
In terms of how employers can minimise the risk of future claims being brought, it may be appropriate to include a warranty from the employee confirming that the claims listed in the agreement are the only claims that they have, a statement to say that the employer has relied on the warranty when entering into the agreement. Depending on the circumstances it may also be appropriate to include a provision entitling the employer to withhold part of the termination payment for at least three months and only pay the remaining part of the payment if the employee has not brought any claims against the employer.
It is also important particularly where the employee signs the agreement prior to the end of their employment, that steps are taken to minimise the possibility of a cause of action arising that they could then bring a claim for and this could be achieved by either minimising the time between signing the agreement and the termination of their employment, or if that is not possible placing the employee on garden leave for the remainder of their employment so that their contact with others is minimal.
And you might also consider requiring the employee to sign a reaffirmation letter where there is a gap between signing the settlement agreement and the termination of their employment and in that case the employee would reaffirm their waiver claims as at the date of termination.
So we can see that particularly in light of the Bathgate judgment that it is really important that when you are drafting the settlement agreements you give thought to minimising the chance of future claims arising and being brought when preparing and issuing settlement agreements.
So moving on to the wider terms of settlement agreements, apart from reflecting the main bargain, being the waiver of claims, settlement agreements often contain other typical clauses such as confidentiality clauses, non-disparagement obligations and in some cases post-termination restrictions. In return for the waiver of claims employers tend to compensate the employee with money or offer a reference for example and it is, I think, easy sometimes to assume that valuable consideration is been provided for the rest of the obligations in the agreement and we often see employers slip up in this area.
So what I want to highlight really is just to make sure that each obligation in your agreement has valuable consideration being provided for it unless the agreement is being executed by deed.
In terms of confidentiality for example, if the obligation to keep the agreement confidential is made mutual, in other words it applies to both parties, the question of what consideration the employee is receiving should not really arise because the exchange of those promises should be sufficient, but if the obligation is one way, such as only the employee is bound to confidentiality, then it is advisable to allocate specific consideration amongst the total termination payment for the confidentiality obligation itself and that is because HMRC has been known to argue that income tax should be paid on consideration for requirements to keep the terms of the settlement itself confidential.
So taking a step whilst specifying a realistic sum as consideration for confidentiality duty should reduce the scope of arguments with HMRC, which I think everyone wants to avoid.
The same principle is applicable to one sided and mutual non-disparagement obligations, so again do make sure that they are either mutual obligations or specific consideration is allocated and in the case of restrictive covenants entered into on or after termination of employment, they also need to have a payment allocated as consideration in order to ensure that they are binding and enforceable by means of an injunction if the settlement agreement is to be executed as a simple contract.
Although saying that, as always with post-termination restrictions, enforceability is also going to depend on the restrictions going no further than is necessary to protect a legitimate business interest.
We do see on occasion though a desire by employers to introduce new post-termination restrictions without consideration where the contract is being executed by a deed but an employer's ability to do that really depends on the bargaining position between the parties so it might be up to you to manage the expectations of the other stakeholders who want to be pushy about the restrictions to be included, without being willing to offer additional compensation and this is something that might be difficult to achieve if the employer's bargaining position is not a particularly strong one.
On this slide, well we have touched on confidentiality already but I just want to run through the limitations of the confidentiality clause. They are a recurrent feature in settlement agreements as it is normally in both parties' interests for the terms of the settlement to remain confidential and an expressed term is often included to that effect and these days, confidentiality clauses are often referred to as non-disclosure agreements or NDAs.
And we would normally expect settlement agreements to limit the employee from discussing the terms of existence of the agreement and the circumstances leading to the settlement, save for that they may be permitted to disclose information to certain specified categories of people, for example their spouses or immediate family members. If there is a mutual confidentiality clause in the agreement the company will make a promise that its officers and employees similarly will also not disclose the circumstances giving rise to the existence of a settlement agreement, and as a reminder if you do, as a matter of practice, include a mutual confidentiality clause on behalf of the company, make sure that that limitation only extends to employees and officers directly involved in the preparation of the agreement because practically it would be very difficult for the company to manage more than a handful of people. So go back and check your own agreements to make sure that you are not making promises that it would be difficult to keep practically.
The next section of confidentiality clauses is usually a carve out from the general confidentiality obligation which says that disclosure of the circumstances leading to the agreement and the agreement itself may be discussed in specific circumstances and in 2018 the Solicitors Regulation Authority published a warning notice to solicitors on the use of NDAs and the warning notice reminds us that NDAs should not be used as a means of preventing or seeking to deter a person from reporting wrongdoing or cooperating with a criminal investigation or prosecution, reporting misconduct to the regulator or making a protected disclosure under whistleblowing legislation.
So hopefully you are already including these carve outs in your agreements, particularly in relation to protected disclosures because you cannot contract out of whistleblowing legislation, but in case you missed it, there has also been updated guidance by The Law Society to state that NDAs, well in the case of NDAs it would be unusual to prohibit disclosures to professionals, for example for medical or therapeutic reasons on the basis that in those circumstances qualified medical professionals are subject to a duty of confidentiality anyway.
The Government has waded in on this a little bit and has indicated that when it comes to medical professions, therapists and counsellors would not necessarily fall within this exception as they are not regulated professionals with strict use of confidentiality. But keep in mind that some categories of therapists can voluntarily join the register to become professionally accredited and are then bound to observe a duty of confidentiality.
So when you are reviewing a confidentiality carve out we would recommend that for the time being when including an exemption for medical professionals to the extent that that applies to therapists and counsellors, make sure that it is limited to those who are subject to professional duties of confidentiality. And also when it comes to the carve outs make sure that the confidentiality clause is appropriate for the particular context of the individual case.
And I should say that the SRA warning notice is directed at anyone who is regulated by the SRA and highlights that issues such as inappropriate use of NDAs or failing to report misconduct that is the subject of an NDA may put practitioners in breach of SRA principles.
Over recent years the #metoo campaign has highlighted situations where NDAs or confidentiality clauses in settlement agreements in an employment context have been used inappropriately as a way of deterring individuals from reporting incidences of sexual harassment and abuse. So this has really prompted increased scrutiny around the use of NDAs and in turn has highlighted the potential repercussions which practitioners involved in advising on those types of clauses, so it really is one to get right and take seriously.
As a result as well in terms of horizon spotting, the Government has a lot of pressure on it to act and legislate against the unscrupulous use of confidentiality clauses in discrimination and harassment cases, but also more widely, so there may be more coming down the tracks in this area.
Moving on to our next topic, one perhaps that many would rather not think about often and that is tax. For disclosure my specialism is employment law and not tax law, but when handling settlement agreements it is something that we need to grapple with every time. So it is necessary to have a good grasp of the basics and the basics tend to be that payments in lieu of notice, holiday pay and bonus payments are taxable and compensation payments are paid tax-free up to £30,000 under the exemptions set out in the Income Tax Earnings and Pensions Act, ITEPA.
And where it goes past those standard payments either irregularly, it is at least important to be alive to the fact that there could be tax implications on other payments, but at that stage it may just be necessary to get more advice.
So on the slide I have listed common areas where employers can get in a twist over tax. The first is on continuing benefits. It is not uncommon for some employees to request that certain benefits continue after their employment ends; mobile phones, access to healthcare and in this area there is firstly a practical point to keep in mind and we would recommend that you do not commit to offering a continued benefit after the termination of employment, unless you know that the provider is willing to do that as well, so either check with your provider first before agreeing, or make the benefit conditional on the approval of the provider. And secondly it is important to keep in mind that a benefit like this is also likely to be taxable and should be highlighted in the settlement discussions with the employee.
The next point I want to flag is a point that has been around for a while and that is payments in lieu of notice which are now all subject to tax up to and edging around full post‑employment notice pay, which is calculated using a specific formula under ITEPA and the tax rules apply where there has been a termination and then a payment. There was previously a statement shown between payments made as a contractual payment in lieu of notice, which were fully taxable, and payments that were not contractual, but that distinction has now gone and the aim of the legislation is to tax as earnings the basic pay the employee would have earned had the employee worked their notice period, even where there is no contractual right of payment in lieu of notice.
So once you have calculated the post-employment notice pay figure you need to compare that to the actual payment that is paid on termination. If the actual termination payment is equal to or less than the post-employment notice pay, the whole amount is treated as earnings and employee taxable. Whereas if the termination payment is more than the post-employment notice pay figure then the amount equal to the post-employment notice pay figure is treated as earnings and is taxed and the balance will therefore have been the £30,000 exemption under ITEPA.
Another easy area to forget is redundancy payments which provided they are not taxable as post-employment notice pay fall within the £30,000 tax exemption, but it is important to remember that you only get one £30,000 tax exemption in relation to each termination of employment. So this means that any payments that fall within that £30,000 tax threshold must be aggregated and it is particularly important to remember and easy to forget where the employee was made redundant several months ago, received a large redundancy payment and subsequently brings a claim, because when you come to settle that claim and make a termination payment it may be that the employee has used up some or potentially all of their £30,000 tax exemption already. So that is just something to keep track of and keep in mind.
Also in settlement negotiations you may be asked to apportion some of the overall settlement payment to injury to feelings. I know that not all employers will want to do this because it might seem like an admission of wrongdoing but nevertheless it is sometimes what is agreed, but if an injury to feelings payment is being made you will need to assess whether that injury to feelings payment arises from discrimination during the employment or discrimination connected with the termination itself, because if the payment relates to injury to feelings and the discrimination giving rise to the payment is not related to the termination of employment it can be free of income tax. If the payment compensates for financial loss and the discrimination giving rise to the payment is not related to the termination of employment, the payment is not a termination payment but might still be taxed as earnings and compensation for loss of employment where the cause of the termination is discrimination or where discrimination occurs in the process of termination is caught by the ITEPA £30,000 tax exemption threshold.
So really when assessing the injury to feelings payment you are making, you need to be honest with yourself and the business as to what the injury to feelings payment relates to, because it might be tempting because some injury to feelings payments can be paid tax-free to pin down the injury to feelings payment in a particular area, but you should avoid doing that and be honest with yourselves and the business.
You should also refer to the Vento guidelines to assess what you think the likely award for injury to feelings payment will be if the employee's claim came before an Employment Tribunal and for those that are not familiar with the Vento guidelines they stem from a Court of Appeal case which sets out three bands of awards for injury to feelings and they can be categorised as lower, middle or upper band. So just because an injury to feelings payment might have a favourable tax treatment you need to avoid apportioning any greater amount to that injury to feelings payment than would be awarded by the Tribunal.
Now I appreciate that is a lot to take in on tax and you are probably going to be relieved to hear that that is the end of the tax portion of the webinar, but on the last slide I promise it is less technical because it contains some practical tips.
So yes I just want to finish with practical steps which should be taken when entering settlement discussions. If the settlement agreement is targeted at an employee who may be in line for dismissal, it is easy I think to get caught up in negotiating the settlement and you can call the employee into a meeting, tell them that it is not going well and that maybe you would like them to leave, but that you will be offering them a settlement agreement.
You then send the employee out the door with a draft settlement agreement ready for discussion with their lawyer, but have you given them notice and the answer is not necessarily because the provision of an unsigned settlement agreement will not constitute written notice of the termination of employment. So this is particularly important to keep in mind if negotiations become protracted, if you have not given notice to terminate when you intend to, you could end up handing over more money in respect of normal pay and then notice pay than perhaps you had anticipated paying by the time the agreement has been signed. So as well as providing the settlement agreement, if the employment is going to terminate, make sure that you provide effective notice in accordance with their contract and do not just rely on providing them with a draft settlement agreement.
And finally though it might seem a bit muddy, just make sure that you, well you might find it useful to make a list of who is going to perform all of the tasks set out in the settlement agreement because you do not want to be in breach of the agreement and it might be that you need to keep track of timings of payments, particularly if any of the payments are going to be deferred which could become a more common practice because of the limitations around settlement agreements to settle future claims, so it is good to keep track of those. It is good to keep track of timings for drop-off or collection of company property so nothing goes missing. There may be further obligations particularly if the employee is remaining in the business, that you need to have in mind, for example if there has been an allegation of discrimination and one of the obligations in the agreement is to provide managers with training, you need to make sure that training happens. Similarly if there has been an incident of disability discrimination and the employee needs adjustments which have been agreed on in the settlement agreement you need to make sure that that happens at a local level when they return to their teams.
OK everyone that completes what was I suppose a whistlestop tour of the areas where employers may fall down settlement agreements and a thing for employers to keep in mind and I hope that if nothing else, when you are involved in your next agreement you stop and think and just consider whether the agreement is doing what it really should be doing, and on that note, I hand you back to Jane.
Jane: Thanks Jasmine. Certainly plenty of food for thought and plenty of questions coming in all the way through as you were speaking so as we said earlier, we will do our best to pick up as many of those as we can before we finish.
So first one Jasmine, it goes back to the point you were talking about sort of early in the webinar about what can actually be settled and it is "do employees need to be aware of the potential claims that they are being asked to settle at the point of signing the settlement agreement"?
Jasmine: That's a good question. There has been a recent Court of Appeal case in this area and to the extent the answer really depends on the specific wording of the settlement agreement. The case I'm thinking of is RBNSQ. In this case, the employee entered into a COT3 agreement. The purpose of the COT3 was to settle claims connected with the employee's employment that existed at the date the COT3 was entered into whether or not they were known to the employee at that particular date and in this case, the claimant raised allegations of discrimination against the employer and after termination of his employment sought a job at another group company and was subsequently unsuccessful in securing the job and RBNSQ allege that his former employer had notified the other group company to reject the application because of his previous employment history with them and was claiming victimisation against his old employer, but in this particular case what was crucial was that the potential act of victimisation complained of occurred before the settlement agreement was signed and so was caught by the COT3 so this is really authority for the fact that the employee does not need to know about the cause of action at the time the settlement agreement was entered into.
Jane: OK. So the next one I think you did touch on this partly, but the question is when is it appropriate to use a reaffirmation letter?
Jasmine: Yes I think we touched on this. So we use a reaffirmation letter really depending on the gap between signing the agreement and the termination date so quite often we might see a gap of a day or so in which case you probably do not need to go through the process of having an affirmation letter but the advantage of having a reaffirmation letter is that you know that an employee is going to access it at some point in the future, you want certainty of what those terms will be, you can negotiate the settlement agreement and then do the reaffirmation at termination so anything that has arisen between the date of the agreement and the termination date is covered in terms of waiving claims and that all stems from the fact that there has always been a concern of the ability of settlement agreements to waive future claims and the advantage of the reaffirmation letter is that you know that everything in the employment period is covered off.
Well I appreciate that clients might be reluctant as well to go down the reaffirmation route just because it potentially adds to costs but just because the employee potentially seeks legal advice, but I think the Bathgate case highlights the fact that actually given the uncertainty around future claims that using the reaffirmation letter where there is a gap can be really key.
Jane: Slightly different topic and something that we did not cover, "are there any special considerations for organisations in the public sector when coming to settlement agreements"?
Jasmine: Yes. I expect there will be governance concerns but those would vary depending on the type of public sector body that the employee's in but there will definitely be concerns to mutual and settlement representative value for money because ultimately the money that has been spent on the termination payment is going to be public money and also aware that in terms of civil service organisations and there are certain bodies they have to keep in mind Cabinet Office guidance when it comes to settlement agreements and confidentiality clause and severance payments and they set out specific wording in relation to those clauses and any deviation requires ministerial approval which could lead to delay which you will need to factor in if you are in the public sector.
Jane: Yes OK so different considerations there. We have five minutes or so left and we have got quite a lot of questions if we just whizz through a few of those quickly.
So there is one about NDAs but I think we have covered that off. There is a question "are settlement agreements unenforceable if the employer does not offer the employee money to get the independent advice" and shall I answer that one Jasmine?
The answer is they are not unenforceable but you are very unlikely to get the employee to sign up unless you agree to cover that independent legal advice because it is you as the employer that benefits from it being a settlement agreement as opposed to just an exchange of letters or a COT3 because an exchange of letters will not settle the statutory claims which is for most employers what you are really worried about so legally it does not say in any of the legislation you have to pay but as a matter of practice you will.
There are a couple of questions going back to the sort of detail of the confidentiality restrictions so one talks about on confidentiality and non-disparagement obligations, is it possible to include a mutual obligation clause to avoid having to allocate consideration. I think you touched on that didn't you Jasmine?
Jasmine: Yes so you will either need to if it is one sided to give consideration to it or make it mutual on the side of the company as well.
Jane: Yes and there is a related question around if you are going to give monetary consideration for confidentiality are we saying the payment itself should be broken down into the different elements so it would be clear if HMRC tried to challenge that.
Jane: OK. There is an interesting one here which I have to say we have not talked about in the team really but it says the £30,000 tax free amount redundancy has remained the same for decades. Will it be increased? Well I will share my view and then you can share your view Jasmine. I think you are right whoever asked the question. It has not been increased for a very long time. In fact I cannot remember when it was last increased but there is certainly nothing I have seen about that level being increased and with the economy where it is, I would have thought the interest to the Government at the moment would be to keep it where it is to maximise tax revenue I don't know if you feel differently Jasmine?
Jasmine: No I don't Jane.
Jane: Interesting one thank you, and there is a question about what practice we are seeing whether we are and this is on COT3 so ACAS consolidated COT3 agreements rather than settlement agreements that you have been talking about, but are we seeing an increase in employer initiated early conciliation? The comment is I can see the benefit of that approach where pushing the employee into the hands of a lawyer is the last thing you want to do. I see sense of that comment but in terms of practice I do not think we are seeing employer initiated early conciliation step up, people are much more likely to use the settlement agreement route with the pre-termination of employment protected conversation I think. Jasmine, do you agree on that?
Jasmine: No I have not seen either
Jane: But it is a correct comment once you send them to a lawyer then obviously they are going to be perhaps a little better informed in many cases than they were beforehand, and just one final one before we close. "When an employee request to exit via settlement, so the employee is actually asking to go and have it rounded off can the employer refuse to pay a compensation payment and only offer notice and a reference which…".
Jasmine: I was just about to say it depends on what the employee wants but you can certainly start from that position.
Jane: Yes it is going to be a negotiation isn't it? What's the strength of the relative bargaining powers but of course bear in mind if you are going to give a reference as the employer you have got an obligation not to provide a reference that is going to be misleading to future employers or you could be on the end of a claim for negligent mis-statement, negligence basically, it is that sort of not passing on a bad apple idea and obviously in the financial services, there are regulations around what you have to say on references but it is always something to be mindful of when you are agreeing to a reference. Often it is just dates of employment and role.
Ok well thank you for all the questions and thank you very much to Jasmine for talking us through all of those pitfalls. As I mention earlier, once we have finished you will get by email a questionnaire. It only takes a couple of minutes to fill it in. Please do find the time to do that if you can and we will take that into account and shape in future topics. Otherwise I will let you know in due course the date for the final webinar in the series probably later this month but otherwise thank you very much for joining. Thank you to Jasmine. Thank you to Lucy and have a good rest of the day.
Jasmine: Thank you.