UK Employment Law\ Employer \ Compromise Agreements
Compromise agreements for unfair dismissal and redundancy
The only other way to settle a matter validly is by making a compromise agreement between the parties in a full and final settlement.
For a compromise agreement to be effective, it must be in writing and must fulfil the following conditions.
- It must relate to the particular complaint;
- The employee must have received independent legal advice from a qualified employment solicitor, an officer of an independent trader union or a worker at an advice centre as to the terms and effect of the proposed agreement, and in particular its effects on his ability to pursue the appropriate rights before an employment tribunal. The adviser who gives the advice must have an insurance policy covering the risk of a claim by the employee for an alleged loss arising out of the advice;
- The agreement must identify the advisor;
- The agreement must declare that the above conditions are satisfied.
If none of these courses are taken, the employee shall still be at liberty to commence proceedings despite the fact he has received a compensation payment to settle.
If he does proceed to make an employment law claim, however, the payment can be taken into account when assessing compensation.
However, if the dispute is only in relation to wrongful dismissal (IE It is only a contractual claim), the parties may settle validly by agreement without the need for any special requirements to be satisfied.
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