COMPROMISE AGREEMENT SOLICITOR

Our employment solicitors provide sound, qualified advice on all matters related to employment disputes in the United Kingdom including advising on the terms of a compromise agreement. It is a legal requirement contained in statute that an employee must be take qualified advice on the terms of such an arrangement and most employers will pay either in full or in part for any cost associated with taking that advice.

A legally enforceable document signed by both an employer and an employee containing agreed terms of the termination of employment is known as a compromise agreement. Both parties usually take into consideration the terms of the previous contract, statutory obligations and conduct of both sides and their respective bargaining positions before coming to agreement on financial compensation for loss of employment. This type of arrangement avoids publicity that may be detrimental to the company, saves on the legal costs of a potential hearing in court or in the Employment Tribunal and allows for the certainty of the amount of payment to the former employee.

These contracts were first introduced by legislation in 1993 with the purpose to legally bind both parties to the terms of a settlement. For a compromise agreement to be binding and valid, these conditions must first be met :-

• The conditions and terms must all be in writing related to the complaint.
• Legal advice was asked from one of the following :-
  • qualified lawyer or barrister
  • fully qualified representative of the trade union
  • authorized and certified worker in an advice center
  • member of the Institute of Legal Executives under the supervision and employment of a laywer

Perhaps the most important thing to bear in mind when considering signing a compromise agreement is that in signing the agreement and accepting the settlement terms you specifically exclude your right to make a claim against your employer in a Court or Employment Tribunal. If however the arrangement only covers certain topics for example redundancy then notwithstanding agreement and signature in regards to redundancy it is still left open for a claim to be made to a Court or to the Emploment Tribunal in regards to an other matter for example discrimination or harassment. Employers will often attempt to persuade employees to sign 'catch all' agreements whereby the employee signs away all of his future rights however there is some question as to the legality of such wide ranging clauses and most professional advisers would not recommend that such an arrangement be entered into.

After consideration of the terms there is no requirement for an employee to sign if that person is not happy with what has been offered and the matter can be referred back to the employer for further consideration however it must be borne in mind that many employers offer more favourable terms than they are required to do at law and in the event of a disagreement may prefer to rely on the statutory minimum sum which could be less than that previously offered in the proposed agreement.