Do I have to contribute to legal costs?
In short the answer is no - employment law does not require the employer to contribute to the legal costs in relation to a compromise agreement.
However, in practical terms for a compromise agreement to be binding and not void, it must be signed off by an independent legal advisor who has a professional indemnity insurance to give advice. No legally binding compromise agreement can come in existence without independent legal advice. Consequently, the employee must seek legal advice at some stage of the process to resolve any employment dispute and without the agreement of the employer to pay a fixed cost from the outset it may slow down the process. It is in the employer's best interest to resolve the matter in an efficient manner and resolve issues prior to them becoming contentious.
The fixed cost of an independent legal advisor is usually in the region of £200-£500 plus VAT. This amount is only payable upon the employee and advisor signing the compromise agreement, and as such, the fixed legal costs should be viewed by the employer as part of the financial package and not a separate item. After all, if the employee decides not to sign the compromise agreement and to commence proceedings in the employment tribunal, the employee is usually responsible for their adviser's legal costs.