Employers and workers often reach a point where “writing is on the wall” and it is often appropriate for both parties to openly discuss what it takes to end the relationship by mutual agreement. The law recognizes that parties should be free to conduct such discussions without fear of incriminating themselves. Previously, however, employers had to wait until a dispute had arised before they could invoke “harm-free privileges” to pursue the proposed settlements. Most of the time, employers would do it long before the parties argued, and this would often take the form of an ultimatum – jump or be pushed around! The result was a number of cases that showed that employers did so at their own risk and, if they spoke too early, the discussions were confusing. This is because a protected conversation is probably not considered a service to the employer. This is a way to explore the possibility of terminating the working relationship with an agreed settlement. It is normal for an employer to offer a settlement contract to a worker who goes on vacation. To show that regulation is a real alternative, it is a good idea for employers to have an alternative formal procedure that can fall back if an agreement cannot be reached. When setting up the comparison option, the employer can either arrange a meeting with the worker concerned to inform them of relevant disciplinary or performance issues, and that a formal procedure for these concerns will soon be initiated, but that before this is the case, there is an opportunity for unscheduled discussion. They are not obliged to accept a proposed transaction contract. In fact, the law does not allow them to accept it until you have taken legal advice. The costs of this legal advice are generally borne by the employer. To support their introduction, Acas has developed a legal code of conduct for transaction agreements [360kb], which explains transaction agreements and provides guidelines for the new transaction confidentiality law.
We advise you to speak to a lawyer early. There may well be room for negotiation for a better conciliation agreement. In addition, the formal process could initially be initiated by the opening of disciplinary or performance proceedings, and a non-debate discussion could be introduced at a formal meeting. An employer is not obligated to inform a worker in advance that he or she intends to discuss a possible exit and transaction contract. ACAS has developed a Code of Conduct for Transaction Agreements (ACAS code) that recognizes that there is also no legal right for employees who are accompanied in pre-termination negotiations. However, the CASA code adds that the fact that a worker may be accompanied by a co-worker or union representative at such meetings is good practice. This could also be beneficial to the employer, as it could reduce the risk that the worker will later claim that the employer acted inappropriately in the conduct of Section 111A negotiations.