Employment Law Solutions. Expert advice... more personal

Compromise Agreements and the Equality Act 2010

Section 147 Equality Act 2010 (‘the EA 2010’)

S. 147 of the EA 2010 has caused confusion in relation to Compromise Agreements. 

Before the introduction of the EA 2010, an employee subject to a Compromise Agreement would be required to seek ‘independent legal advice’ from an independent adviser. However s. 147 of EA 2010 appears to prevent any lawyer who was previously instructed by the employee from advising and signing off a compromise agreement as they are not regarded as an ‘independent legal adviser’ for the purposes of the EA 2010.

As an example, this would effectively preclude lawyers who advised employees in relation to a disciplinary process from then advising on a related compromise agreement.

The current position

The Law Society has taken a cautious approach to s.147 whilst the Government Equalities Office (GEO) does not see s.147 as altering what the position was before the EA 2010. The Law Society has notified the Home Secretary of its concerns and requested a meeting with the GEO. The GEO have confirmed that they will hopefully be publishing further clarification on this point in due course.

Temporary Solution

It is recommended that lawyers or trade union advisors advising in respect of a compromise agreement explain to employees that there is a loophole following the introduction of the EA 2010 which is currently being addressed by the Home Secretary.

Counsel to the GEO have advised that until the matter is clarified, all independent advisors to Compromise Agreements should involve ACAS where substantial amounts of money are involved.

Date: 24.11.10

For more information on the implications of the Equality Act 2010 in relation to the validity of Compromise Agreements please contact Jane Sinnamon (jane.sinnamon@collingwoodlegal.com.)
The information given in this article is up to date at the time of preparation.  However, Collingwood Legal can accept no liability or responsibility for any loss incurred as a consequence of actions taken based on this report.  We would recommend that you take legal advice.  We would be happy to help.

This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *