If you have been offered a compromise agreement or just have a question you wish to ask about compromise agreements, please contact Stephensons Solicitors LLP directly on 0845 144 1441 or complete our online enquiry form.
What is a compromise agreement?
A Compromise Agreement is often referred to as a ‘Severance Agreement’ or ‘Redundancy Agreement’. A Compromise Agreement is an agreement that brings to an end employment claims such as claims for unfair dismissal or discrimination arising out of the employee’s employment or termination. Other forms of simple agreements signed by the employer will not prevent the ex-employee from bringing a claim.
The employee must seek specialist independent legal advice before signing the Compromise Agreement. The employment solicitor should advise the employee on any potential claims so that the employee fully understands the legal issues and the value of any potential claims.
The advantage to the employer of getting a Compromise Agreement is that the employer can be sure the employee will accept the settlement and not seek further compensation. The advantage of a Compromise Agreement to the employee is that s/he is fully advised before settling and is awarded a guaranteed amount of compensation.
Benefits for employees:
As specialist employment solicitors Stephensons Solicitors LLP will help you achieve the best possible settlement. We can assist by:
- Advising you on whether any claims arise on the termination of employment
- If so, advise you what those claims might be worth
- In the light of that information, advise you whether the sum offered is reasonable in the circumstances
- Explain the meaning and effect of the agreement to you and advise you whether anything needs to be amended or changed
- Negotiate on your behalf as required
Why do I need a solicitor?
Compromise Agreements can be written in very legalistic language and can refer to sections of Acts and Regulations which you may never have heard of. Therefore, it is important that you understand the effect of the compromise agreement. It is a legal requirement that you get professional advice on what the agreement means. It is also a legal requirement that your adviser signs the compromise agreement to confirm that advice has been given.
According to the Employment Rights (Dispute Resolution) Act 1998, that advice can only be given by a qualified lawyer, a qualified trade union official or a qualified centre worker, all of whom must be covered by an appropriate certificate of indemnity insurance.
Will I need to pay for this?
The cost of advice under a compromise agreement will in the majority of cases be covered by your employer, meaning that you may not have to pay anything for this advice personally.
Benefits for 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.
