Government to amend Equality Act to meet concerns over compromise agreements

The Government has amended the Equality Act 2010 after concerns were raised over the validity of compromise agreements used to avoid employment tribunal claims.

At issue was section 147 of the Act, which sets out the requirements that must be met if employment tribunal claims are to be avoided through such agreements.

The section states that complainants have to receive advice from an “independent adviser” about the terms of the agreement.

The Law Society first flagged up concerns about the impact of the Act on compromise agreements as far back as October 2010. 

The legislation has now been amended through the Equality Act 2010 (Amendment) Order 2012, which came into effect on 6 April. This will see section 147 altered to confirm that an employee’s lawyer can be an independent adviser for the purposes of preparing a compromise agreement.

Law Society President John Wotton said the original wording of section 147 cast doubt on whether a solicitor for the employee could be recognised as an 'independent adviser' for the purposes of preparing a compromise agreement.

“This could have rendered unenforceable any discrimination-related elements of a compromise agreement made following an employment dispute on which the solicitor had up until that point given advice to the employee,” he said.

“Employers would not have been able to safely rely on these agreements without the risk of challenge due to the ambiguity in the legislation.”