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Compromise Agreements
What is a compromise agreement?
A Compromise Agreement is intended to be a legally binding document between employer and employee, the purpose of which is to bring the employees employment to an end with the agreement that the employee will not bring any employment related claim against the employer.
In most cases, the employee will receive a specified sum of money, which is sometimes paid free of tax, in return for the amicable termination of their employment and an agreement not to pursue any employment claim against their employer in the employment tribunal.
The demand for Compromise Agreements is now ever increasing, especially in redundancy situations.
Compromise Agreements are best suited to those parties who demonstrate a willingness and preference to reach an amicable solution without the need for legal redress in the employment tribunal.
What are the legal requirements of compromise agreements?
It is a legal requirement that the Compromise Agreement must be in writing, the agreement must specify the complaint(s) which may have given rise to a potential claim in the employment tribunal and the employee must have received independent legal advice from a qualified recognised legal practitioner. The employer will also usually make a reasonable financial contribution to the employee's legal fees. In the absence of proper legal advice, the Agreement will not evolve into a binding irrevocable agreement upon execution.
It is important to note that upon correct execution, the terms of the agreement become irrevocable and binding. Such terms include details of any financial arrangements and it is not uncommon to see additional obligations such as a confidentiality agreement. The employee will also be barred from issuing or continuing any legal proceedings against his or her employer.
Compromise Agreements - Our Services
Our team of lawyers assist both employers and employees in employment law disputes. This enables us to see the dispute objectively from "both sides" thereby providing a considered and balanced approach to our advice.
Please do not hesitate to contact our specialist employment law team if we can be of any assistance. Whether you require us to draft a compromise agreement for your business or if you are an employee seeking support and advice on an agreement, we can help.
Our team are willing and ready to assist you.
Please Contact
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Laura Poole Tel.: 01494 670440 Email.: lcp@chebsey.com |
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Sue Bean Tel.: 01494 670440 Email.: smb@chebsey.com |
