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COMPROMISE AGREEMENTS

What is a Compromise Agreement?
A 'Compromise Agreement' (also referred to as a severance agreement or redundancy agreement) is an agreement prescribed by statute to bring to an end statutory claims (ie unfair dismissal or discrimination) arising out of the employee's employment or termination of employment. A simple agreement in writing signed by the employer will not prevent the ex employee from bringing a claim. In practice, compromise agreements tend to list out any conceivable claim that could possibly be imagined.

Basically the employee has to go off and get independent legal advice before signing away his/her legal rights. The employment solicitor should advise the employee on any potential claims arising so that the employee fully understands the legal issues, and the value of any potential claims, before signing away their rights. The employment lawyer who provides the advice must have a form of professional indemnity insurance in place.

The advantage to the employer of getting a compromise agreement is that the employer can be sure the employee will not simply take the money and then sue. The advantage to the employee is that s/he is full advised before settling.

Employees:
As specialist employment solicitors we have advised scores of employees and helped them to get the best possible settlement. If you instruct us, as employment lawyers we will:
1. Advise you on whether any claims arise on the termination of employment.
2. If so, advise you what those claims might be worth.
3. In the light of that information, advise you whether the sum offered is reasonable in the circumstances.
4. Explain the meaning and effect of the agreement to you and advise you whether anything needs to be amended or changed.
5. Negotiate on your behalf as required.

The cost of advice will often be covered by the employer, meaning that you may not have to pay anything for this advice personally.

Employers:
Many employers fall into some very difficult traps when offering compromise agreements and the taxable position on severance payments is not always straight-forward. We can guide you through this difficult process, so call us now to discuss your situation.

Reculver Solicitors is regulated by the Solicitors Regulatory Authority. Principal: James Carmody. Consultant: Carol Aylott. Serviced office. Meetings by appointment only.