Compromise Agreements in London or UK

What is a Compromise Agreement?

A 'compromise agreement' is a legally binding agreement which is considered a mutual agreement between the employer and employee. It is provided in lieu of termination of employment either by reason of redundancy, by agreement or in settlement.

Employers are frequently using compromise agreements as a method of preventing potential future complaints to a tribunal, especially in redundancy situations.

Why would a Compromise Agreement be necessary?

An employer can only protect itself from an employee bringing a complaint to a tribunal after redundancy or a dismissal by having them sign away their right to do so in a Compromise Agreement. This can only really be done in a compromise agreement and has the effect of turning the redundancy package or potentially unfair dismissal settlement offer into a "full and final" settlement of any claims the employee has against the employer. Likewise if there has been any internal grievances or disciplinary a compromise agreement can ensure a swift resolution without any come back for either the employer or the employee.

Why would the Employee need to see a Solicitor?

For a compromise agreement to be binding the employee must be advised as to its contents. The Employment Rights (Dispute Resolution) Act 1998, provides that such advice can only be given by a qualified lawyer, a qualified trade union official, or a qualified advice centre worker, all of whom must be covered by an appropriate certificate of indemnity insurance. The lawyer will advise the employee on whether the terms of the compromise agreement offer sufficient protection and should also advise on the level of compensation which would be reasonable in the circumstances. This is calculated by the number of years the employee has worked, the salary and most important of all, the reason for the termination, dismissal or redundancy.

An employer will also be required to contribute to the employee's reasonable legal costs and this will be stated in the compromise agreement terms.

Why choose us to advise you on the Compromise Agreement?

A City Law Firm LLP can draft tight and comprehensive compromise agreements and handle all negotiations on your behalf. We make the potentially laborious process of reaching a settlement swift and stress free. We also have a successful track record of negotiating compromise agreement terms; settlement sums and favorable references on parties behalf. Whether you want a Compromise Agreement or already have a draft compromise agreement give us a call for an initial chat.