Settlement Agreements under the Equality Act 2010

Settlement Agreement Solicitor, Roger Cheves on an Amendment to the Act that clarifies the definition of ‘Independent Adviser’.

For the past year or so, academics and lawyers have been having a wonderfully esoteric argument over the concern that there are ambiguities in the Equality Act 2010. It was feared that this could have had far-reaching implications for the use of Settlement Agreements between employers and employees.

Section 147 of the Equality Act sets out the requirements needed to have a qualifying Settlement Agreement to settle claims arising under the Act. One of these is that the employee must receive advice from an “independent adviser” about its terms and effect. However, this, it was argued by some, could mean that an employment solicitor who was instructed by the employee prior to the production of the final Settlement Agreement could not, as a result, be described as truly “independent”. This would have meant that the solicitor would therefore be precluded from advising on the Settlement Agreement any further. Two top employment law QCs couldn’t agree on whether there was a problem and the Law Society was forced to issue a warning to solicitors, although the Department for Business insisted there wasn’t any problem.

Those who were exercised by this academic argument can now rest easy (or at least they can after 6 April, when it comes into force) because the Government has produced the Equality Act 2010 (Amendment) Order 2012, which amends section 147 (the offending clause) of the Equality Act. The definition of an ‘Independent Adviser” for the purposes of completing a Settlement Agreement has been adjusted to remove the anomaly.

For all the furore on this subject in a section of academia, I am not aware of any Settlement Agreements that have been completed in the time since the Equality Act came into force being held to be unenforceable because of this rather poor piece of drafting but, no doubt, somebody would have tried, if this amendment hadn’t been produced. It was a case, really, of not a lot of fuss about very little, but it kept some journalists and academics in work in these difficult times!

Roger Cheves is an employment law solicitor with Slee Blackwell Solicitors. Roger deals with all aspects of employment law, including advising on Settlement Agreements. If you have any concerns about your employment or would like specialist advice on a Settlement Agreement then call Roger on 0808 155 6389 or email him on roger.cheves@sleeblackwell.co.uk