The pre-school and one of its now former teachers had agreed to the teacher leaving the school and the terms of her departure. All of the terms were set out in a full, final and confidential settlement agreement, entered into during mediation and signed off by a mediator. So far, so good…
However, the problem arose when the Head Teacher of the pre-school subsequently decided she could not write a reference for the teacher in the positive terms agreed in the settlement agreement. She appeared to feel this would be dishonest. However, the Employment Relations Authority had no hesitation in ordering compliance with the terms of settlement, meaning the Head Teacher was ordered to provide the reference, as agreed, despite her personal misgivings about its contents.
The case is a timely reminder about what should or should not be agreed to in mediation, as well as the parameters around giving references (which are frequently negotiated as part of mediated settlements).
A mediated settlement, certified by a mediator, is final and binding and the Authority will require strict compliance with its terms. It can also impose a financial penalty if it wishes. It is therefore crucial to ensure the obligations you agree to can be met to the letter at a later date.
Just as importantly, there is no legal obligation on an employer to provide a reference. However, where a reference is provided, it must be honest and accurate. Therefore, employers should think carefully about agreeing to provide references in settlement agreements or in any other context, if the content could be misleading. The Fair Trading Act
1986 contains a specific provision which prevents misleading conduct in relation to employment. This prevents any person from engaging in misleading or deceiving conduct in relation to employment, which includes employment offered by another person. As such, a misleading reference provided by a former employer, could quite easily result in a breach of the Fair Trading Act.
So when you’re in mediation or negotiating a settlement, always bear in mind that the terms of settlement will be final and binding, and must be complied with. And, if references are involved, stick to the truth!