Compromise Agreements

An effective solution to employment termination

We want to work with you for the best outcome to problems linked to employment termination. If you are an employer, we will ensure that your Compromise Agreement protects you from potential legal proceedings. If you are an employee, we will ensure you have all the advice you need, and receive appropriate payments from your employer.

Compromise Agreements

When an employer wishes to terminate an employee’s contract, a Compromise Agreement may be reached between both parties outlining the terms on which the person is to leave the employment.

The Agreement resolves any problems and saves time and potential costs for both parties. It provides protection for the employer because the employee waives any right to take legal action regarding the termination of their employment.

Employees benefit too. The agreement ensures they receive all payments that are due to them. Also, they often receive an additional ex-gratia payment from their employer that may not be taxable.

Legal advice and costs

It is essential that employers and employees receive legal advice before entering into a Compromise Agreement. The validity of the Agreement will be in doubt unless it meets certain legal requirements.

Employees must receive independent advice so the employer normally pays for the cost of the employee consulting a solicitor. At Kingsley Smith, we provide a competitively priced service that is usually within the employer’s allowance for legal advice.

Are you an employee?

If your employment is about to be terminated, please contact us for advice because:

• it is important that you do not sign any agreement before knowing your rights and understanding the Compromise Agreement
• we can also advise on tax implications for payments you receive
• you may have a legal claim against your employer if it is breaching its legal duties, or your contract of employment

Are you an employer?

If you are an employer in the process of terminating employees’ contracts - whether group or individual - we can create Compromise Agreements that protect you from legal proceedings, and advise on the beneficial clauses you should include. It is much better to achieve agreement than to risk an Employment Tribunal hearing!

Can We Help You?

Please call us on 01634 811 118, complete our online enquiry form, or email our Employment Law specialist Chris Eastland.

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