A plea for early dispute resolution; will settlement agreements help?

June 14th, 2013

I have been involved in a few cases recently (and more than I care to remember in the past) where long-standing, previously well-respected and high performing individuals have been exited following serious allegations raised against them. The allegations have come without warning and in some cases with little real substance.

No matter how many times I am involved in these situations, I fail to understand how organisations can possibly think that this is a sensible or commercial way of dealing with an exit. The results are devastating for the individuals concerned; there is always a real sense of hurt often made worse by imposed isolation from people who were once colleagues and probably friends over many years. Other emotions range from anger, disillusionment, disbelief and loss of self-worth. A serious impact on individual’s health is not uncommon. Fairly obviously none of this helps individuals get to a place where the dispute can be resolved quickly, easily or positively. The other aspect that never ceases to amaze me is how easily and quickly previous colleagues seem to turn against the employee concerned, much like the pack ousting a lone wolf. (For further wolf analogies see previous blog here  http://blog.alisonlove.co.uk/2012/11/22/mediators-and-wolves-how-do-we-compare/ )

In trying to rationalise why organisations act in this way, the only explanation I can come up with is that those individuals tasked with dealing with the matter react and respond in an emotional way and do not logically think through the consequences.

Whatever the reason, a much better option is to have an adult conversation with the employees concerned. Not only does this limit the very serious impact on the employee, it also saves considerable cost and management time for the employer and limits the negative impact on other employees and reputational damage. In many situations I have often requested the opportunity to have such a conversation only to be ignored or refused. The result;  lots of angst for all, time wasted, costs incurred, relationships destroyed forever and a settlement ultimately reached many months later.

There are a number of options available to employers to enable them to have these adult conversations and conclude matters differently, for example without prejudice conversations and compromise agreements all of which can be achieved with or without the assistance of mediation. I would urge all employers to think seriously about these options before hitting a nuclear button.

In order to further assist resolution, Settlement Agreements are shortly to be introduced  later this year and a draft code of practice has just been published. Overall I am not sure the new provisions add anything that could not already be achieved under the current legal framework or with sensible HR or management practices. However if the new arrangements do encourage greater use of earlier settlements then I am all in favour. Also there are one or two provisions which may help to give employers greater confidence to start a dialogue; these are

  • A SettlementAgreement can be used where there is no existing dispute or where the parties are unaware of an issue. This broadens the current protection of “without prejudice” discussions which only apply where there is a pre-existing dispute.
  • The conversations and negotiations are confidential and can not be referred to in evidence in an employment tribunal.
  • The provisions make clear that there should be an opportunity to negotiate and agree terms. Employees will be given 10 days to consider the proposal and seek advice. This is an improvement of current practice where often employees are presented with a fait accompli and put under pressure to sign quickly.
  • The code also makes clear that face to face meetings could be helpful with some encouragement to allow the employee to be represented. If these meetings are well handled this could be really helpful in achieving agreement and resolution. Employers should ensure that those handling the meeting have some objectivity and neutrality and good conflict resolution skills (possibly mediation skills). This would greatly assist in ensuring an understanding and acceptance of the respective positions and positive resolution.

There are some pretty fundamental limitations of the use of settlement agreements; the  confidentiality protection will not apply where there is “improper behaviour” (lawyers will have fun with that one) but is stated to include and harassment, bullying, intimidation, discrimination or undue pressure (the “sign or else” approach!)

Coming back to my plea, I do hope that these new provisions encourage earlier dispute resolution but in any event I would urge all employers to stop and think. To consider having that adult conversation and using alternative dispute resolution instead of making serious allegations and suspending employees as a means of exiting individuals. In the vast majority of cases where I have acted for employees in these situations they invariably say “Do you know what? If only they had talked to me, I would have been happy to go”.  Wouldn’t that have been a better outcome?

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