Compromise Agreements for Employers

What is a Compromise Agreement?

After the negotiation of a compromise package on departure of an employee, an agreement is concluded on the employee signing a compromise agreement, also known as a compromise agreement or termination agreement.  It is an agreement that allows "full and final settlement" for certain claims between an employer and employee.

One of the foremost purposes of a compromise agreement is to prevent the employee from bringing or pursuing a claim before the Employment Tribunal.

Statute requires compromise agreements to meet the following conditions:-

  • the agreement must be in writing;
  • it must relate to a particular complaint(s) within their contemplation;
  • the employee must receive independent legal advice;
  • the advisor must have in force a professional indemnity policy;
  • the agreement must identify the adviser;
  • the agreement must state that the conditions relating to compromise agreements have been satisfied.

These are features common to all compromise agreements but a compromise agreement should be negotiated and drafted to fit the circumstances. For instance, if you are offering the employee above what is the contractual and statutory minimum you may wish introduce new restrictive covenants into the compromise agreement or other provisions to protect your business interests.   So, contact at the earliest opportunity either Andre or Ruth at Stone Joseph solicitors (0207 8549098), a specialist boutique employment practice to advise on what are the most relevant issues for you.

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