UK Employment Law\ Employer \ Compromise Agreements
Getting advice on Compromise Agreements
A compromise agreement outlines the terms of a deal between an employer and employee in order to settle a dispute, whether it is about equality, pay, or performance.
The agreement between the parties and brokered by a solicitor or advisor gives details about any compensation package or assurance. There are often terms that both parties have to agree to stick by once the deal is signed. These can be about confidentiality (to avoid bad publicity) and what actions both parties can carry out afterwards (there are often terms about restrictions on working in certain professions before a date and in a specified location).
If it has been reached because of redundancy, it may also give details about the kind of reference that will be given to the redundant employee. Such a reference will often be added to the back of the agreement.
Both parties should always seek legal advice to make sure they agree to, understand and abide by the terms.
Compromise agreements for unfair dismissal and redundancy
One way to settle an employment matter is by making a compromise agreement. Such a contract between employer and employee is deemed to be in full and final settlement.
An effective compromise agreement must be written and do the following:
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It must be drafted in direct relation to the particular complaint;
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The employee 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 the employee lose out in the agreement. The advisor would ensure the terms and effect of the proposal are legally enforceable. They would also ensure the employee’s ability to pursue any appropriate rights at a tribunal.
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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;
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The advisor must be identified in the agreement;
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The final compromise agreement must declare that all of the conditions are satisfied.
If an employer fails to take this route, then the employee would be able to take proceedings, even if a compensation payment had been made. If that employee then takes proceedings, any such payment can be taken into account when making a compensation assessment. On the other hand, if the claim only relates to wrongful dismissal, the employer and employee can settle by agreement. In this case there would not be any need for special requirements to be satisfied.
