Compromise Agreements
If you are being made redundant, your employer will often ask you to sign a Compromise Agreement. You should only do this once you have received expert advice from an Employment Law Specialist. The Compromise Agreement sets out all of the compensation you will receive from your employer but it also may restrict your future employment. Signing it without legal advice could be incredibly restrictive on your future employment prospects. We can provide you with advice that ensures your interests are protected and on most occasions our legal costs will be paid by your employer.
Compromise Agreements
When an employer wishes to terminate an employee’s contract, a Compromise Agreement can be used to outline all of the terms on which the person is to leave the employment.
The Compromise Agreement resolves any problems between the parties and usually removes the right for either party to take the matter to an Employment Tribunal. Therefore, it is crucial that you ensure your future employment opportunities are not being restricted, and that you are receiving the correct amount of compensation.
You should never sign a Compromise Agreement without receiving legal advice because:
- it can remove any rights to make a claim against your employer in the future
- there may be tax implications for receiving payments which we can legitimately help to reduce
- you may have a legal claim against your employer if it is breaching its legal duties or your Contract of Employment
Potential Benefits For You
Often the employer will be making an additional payment to you, known as an ex-gratia payment. They will do this to reach an amicable settlement and in recognition of the fact that you cannot take any future action against your employer (buying them peace of mind). It is often not taxable which is an additional benefit for you.
Legal advice and costs
It is essential that you 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 will usually pay for your legal costs. We act on a fixed fee advice basis, ensuring that you can have peace of mind when asking us to help you.
Can We Help You?
Please call us on 01634 811 118, complete our online enquiry form, or email our Employment Law specialist Chris Eastland.
We would like to thank you for the superb work and attention to detail that has gone into our dispute with the council so far!