Compromise Agreements – Employment Law Advice for Employees

What is a Compromise Agreement?

A Compromise Agreement is a contract where you, the employee, agree to compromise your legal claims against your employer on agreed financial and other terms.

Compromise Agreement – without prejudice

You may have been offered a Compromise Agreement during a ‘Without Prejudice’ discussion with your employer. This sometimes takes place when your employer is proposing to dismiss you whether for redundancy or some other reason, or if you have brought an employment tribunal claim or filed an internal grievance against your employer.

Negotiating a Compromise Agreement – Why do I need Legal Advice?

You should take legal advice prior to signing a Compromise Agreement so that you know what your employment rights are before signing them away.

Also, in order for you validly to waive your employment tribunal claims against your employer, the agreement has to fulfil certain conditions, which bestow protection on the employee. These include that you have taken advice from a ‘relevant independent adviser’ on the terms and effects of the agreement. ‘Relevant independent advisers’ include solicitors and qualified trade union advisers. It is also important to know that both sides can agree that the employer will provide a reference in an agreed form to potential employers.

What are some other standard terms in a Compromise Agreement?

In addition to clauses about payment terms and references, compromise agreements usually contain terms preventing one or both parties from making disparaging statements about the other. Compromise agreements also often require the employee to keep the compromise agreement confidential. Often, employers will ask that the employee provide an indemnity against any tax payable on the compensation sum.

Who pays for the advice on the Compromise Agreement?

Usually, your employer will contribute a sum towards your legal costs. In many cases we handle, this will cover your legal costs in full.

What if I decide to bring a claim in the Employment Tribunal?

If you decide not to enter into a Compromise Agreement, we can act for you in pursuing a claim in the Employment Tribunal. We have substantial experience in acting for clients in their Employment Tribunal claims on a range of matters including unfair dismissal, complex discrimination claims, whistle blowing claims, redundancy pay, breach of contract and unlawful deduction of wages.

How do I contact Knight-Webb Solicitors?

If you are currently employed and are worried about an employment-associated issue which may result in you needing Compromise Agreement advice, or there is a threat of unemployment then please do not hesitate in contacting us today. We have many years experience in dealing with employee related concerns.

I live outside of London, can I still speak to you?

Even though we are based in London, we have many clients further afield, if you are based outside of London please contact us today and we can arrange a telephone conference.