“Drafting error” in Equality Act leaves doubt over enforceability of compromise agreements

The ability to use compromise agreements to create binding settlement of potentially high value claims under the Equality Act 2010 has been called into doubt by lawyers.

| Filed under acas discrimination equality act

The ability to use compromise agreements to create binding settlement of potentially high value claims under the Equality Act 2010 has been called into doubt by lawyers. The wording of section 147 of the Act, which sets out the conditions for a valid compromise agreement, arguably makes it impossible for any adviser to meet the requirement for individuals to receive advice on the terms and effect of entering a compromise from an “independent adviser”.

The employment provisions of the Equality Act 2010 came into force on 1 October 2010 and replace previous legislation covering unlawful discrimination on the grounds of age, race, gender, sexuality, disability and religion or belief. Although the Act as a whole was the subject of lengthy public consultation and debate, the difficulty with the wording governing compromise agreements was spotted only after the first claims under the Act started to be settled. The Government Equalities Office has issued a statement that the criteria defining an “independent adviser” are no different than under the previous discrimination legislation replaced by the Act. At least one leading employment law barrister believes that this is the correct interpretation of the offending section – although an equally eminent barrister has given a contradictory opinion. Until the matter has been settled by case law or a legislative amendment employers seeking absolute certainty in compromising claims for any form of discrimination or harassment should consider using the services of ACAS to settle claims under the Act. ACAS offers a pre-claim conciliation service so it is not a requirement for proceedings to be started.

For the Equalities Office position, with links to arguments on both sides of the debate, see link below.

Further reading

Disclaimer

This news item is not intended as a comprehensive summary of the subject matter and does not constitute legal advice. Parties are advised to obtain professional advice addressing individual facts and circumstances before acting on this information.