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A drafting error in the Equality Act 2010 makes enforcing compromise agreements pertaining to discrimination and equal pay claims impossible the Law Society has warned.
In order for a compromise agreement to be binding, the complainant must receive advice from an ‘independent adviser’ about the terms and the effect of signing the agreement.
However, the Law Society has warned that the way section 147 of the Act is drafted suggests that an adviser who has been involved prior to the signing of the final agreement would be precluded from being ‘independent’.
The Government Equality Officer has said that the situation is as it was prior to the Act being passed, and only advisers who had acted for another party would be precluded.
But advisers have said that the meaning of the section is quite clear and that an adviser who has advised an employee prior to the signing of the agreement is precluded from acting as the ‘independent adviser’.
It is clear that this is a drafting error, but until the matter has been resolved, employers need to be wary when compromising claims under the Act. Until the issue is resolved, employers could take one of the following courses of action
- Use an ACAS form COT3 to settle any possible claims where possible;
- Add a clause into the compromise agreement that states that if the employee brings an action against the employer in relation to the acts complained of in the agreement, the employee will indemnify the employer for legal costs and any compensation.
If you have any queries or concerns regarding this issue, please contact us and we will be happy to assist.
