Compromise Agreements
Sometimes a dispute between employer and employee can be resolved quickly and without having to go to a tribunal. One of the ways of reaching a resolution can be through a compromise agreement.
What is a compromise agreement?
A ‘compromise agreement’ is a legally binding agreement that is usually drawn up at the end of your employment. It often includes an agreement on severance payments and basically settles any claims made at that time or in the future. In return you agree not to take any claim you may have against your employer to an employment tribunal. Quite often, the compromise agreement will also deal with the notice element in your contract of employment and may include a “payment in lieu” rather than you having to work any notice time before leaving the company.
Employers are now using compromise agreements more often rather than agreeing to go to a tribunal, especially in redundancy situations.
Why do I need a compromise agreement?
Compromise agreements are recognised by law and are the only way a claim can be legally binding without tribunal proceedings beginning. They are often a much faster way of resolving a dispute and reaching a settlement that benefits both employer and employee.
As an employer, you should have a compromise agreement drafted by a qualified solicitor. If you are an employee, then you must have a compromise agreement explained to you by an independent and qualified solicitor before the agreement can be finalised. The solicitor giving the advice must also confirm in writing that you have been given appropriate and legally binding advice.
A compromise agreement is normally drafted by a solicitor for the employer to offer to the employee. You must seek legal advice before signing the compromise agreement to ensure that you fully understand the terms you have been offered.
Normally, the legal fees for providing you with independent legal advice on the compromise agreement will be paid for by your employer.
All the solicitors on our panel offer this service.
