UK Employment Law\ Employer \ Compromise Agreements
Compromise agreements explained
Compromise agreements were introduced under the Trade Union Reform and Employment Rights Act 1993. They are mainly used in cases of redundancy, unfair dismissal or unlawful discrimination. There has been an increase in the use of these agreements in recent years – particularly because of recession. Many employers want to trim their workforces – and so make use of them to come to an agreement with employees over their future.
A compromise agreement between you and your employer is usually a document spanning several pages. It outlines the terms of a deal that fully, and finally, resolves any disagreement. Most employees see compromise agreements as a final resolution of a matter and so rarely take action subsequent to a deal being made. The agreements are rarely breached either. This is often because the deal is fair and favourable in terms of an agreed pay-off and terms of reference.
If it is put together to settle a dispute over equal pay or discrimination, then it would probably detail a compensation package (including assurances given by your employer). It would also lay down details of how you would accept those terms and give an assurance that you would not pursue legal action over the issue in question. You and your employer may agree to keep terms of the agreement confidential and this may be a clause in the agreement.
If the compromise relates to your redundancy, it will probably cover the termination reason and date, the details of the redundancy package and the date of payment. It will also detail the legal rights that you are signing away and will probably include a confidentiality clause to avoid bad publicity.
An effective compromise agreement must be written and do the following:
- It must be drafted in direct relation to the particular complaint;
- You must receive independent legal advice from a qualified employment solicitor, an officer of an independent trades union, or an advice centre worker. Such a person must have an insurance policy covering them should you lose out in the agreement. The advisor would ensure the terms and effect of the proposal are legally enforceable. They would also ensure your ability to pursue any appropriate rights at a tribunal.
- The adviser who gives the advice must have an insurance policy covering the risk of a claim by you for an alleged loss arising out of the advice;
- The advisor must be identified in the agreement;
- The final compromise agreement must declare that all of the conditions are satisfied.
|
