Want to talk to an expert employment law solicitor?

You'll receive a callback from a specialist within an hour

We’re going to be taking a look in this post at negotiating compromise agreements from an employee’s perspective – a post on how an employer should approach a potential compromise agreement situation will be addressed at a later date. We’ll therefore take a brief look at the issues below in examining how and when to negotiate a compromise agreement. Each of these issues will then be analysed in greater detail in future posts.

  1. Is the situation amenable to a compromise agreement?
  2. Analysis of the potential compromise agreement
  3. Negotiation with your employer
  4. To sign the agreement or not?

Is the situation amenable to a compromise agreement?

There are a variety of situations which might call for the negotiation of a compromise agreement. The most common ones are as follows (in no particular order):

  1. The employee has been made redundant or is at risk of redundancy
  2. The employee has been subjected to disciplinary action or an investigation on allegations of incapacity or misconduct
  3. The employee is contemplating resigning because of the way that they have been treated by their employer or their colleagues
  4. The employee has been discriminated against or harassed in some way by their employer

The above situations aren’t mutually exclusive – discrimination claims, for example, often overlap with constructive dismissal claims.

In order to determine whether a situation is amenable to a compromise agreement, the employee must either ask for a compromise agreement or – more simply – be offered a compromise agreement by their employer. The latter situation is generally the less complicated one – the employee doesn’t have to risk “going out on a limb” in these circumstances.

Analysis of the potential compromise agreement

If you’ve been offered a compromise agreement or your employer has agreed to look at the possibility of a compromise agreement then the question that normally springs to mind for employee is “how much can I get?”. This is, however, not the correct way that such a situation should be approached. There are generally four questions that should be asked to analyse the potential value of a compromise agreement:

  1. How potential claims does the employee have in the Employment Tribunal? (i.e. unfair dismissal, constructive unfair dismissal, discrimination, harassment etc.)
  2. How strong are those claims?
  3. What would those claims be worth if they were successful at the Employment Tribunal?
  4. What is a reasonable settlement value for the compromise agreement, accounting for litigation risk? (i.e. the risk that the claims might fail)

For example, Mr X may have a claim for unfair dismissal. He was dismissed summarily after two years’ employment for no discernible reason and there was no procedure carried out in dismissing him. Let’s say that this claim has a 75% chance of success in the Employment Tribunal, should he choose to pursue this course of action. Further, if he were to succeed in his claim then it would be worth £10,000 (Employment Tribunal awards generally aren’t that high). What would the reasonable settlement value of Mr X’s compromise agreement be? It would be £7,500.

Negotiation with your employer

In order to negotiate a compromise agreement there will need to be some degree of dialogue with your employer. This will normally involve both parties (the employer and the employee – or their representatives) making offers and counter-offers, attempting to reach what both parties deem to be a reasonable settlement value. You may choose to involve a solicitor or not at this point – it’s up to you. However, you should bear in mind the above analysis and be reasonable in negotiating the compromise agreement – otherwise your efforts are probably going to be in vain.

To sign the agreement or not?

After the negotiations are completed you have to decide whether to sign the compromise agreement or not – once the agreement is signed and date by both parties then it will be a binding contract.

About

Redmans Employment Team deal with employment matters for both employers and employees, including drafting employment contracts and policies, advising employers and employees on compromise agreements, handling day-to-day HR issues, advising on restructures, and handling Employment Tribunal cases for both employers and employees

Call 020 3397 3603 to speak to one of the members of our employment team or email us on enquiries@redmans.co.uk.

Share →

Our awards

Request a callback

Your name

Your email

Your telephone number

Contact us

Please feel free to discuss your own position and concerns. Contact your nearest office on:

T: 020 3397 3603
E: enquiries@redmans.co.uk
W: www.redmans.co.uk

Testimonials

4.52 Average

21 Reviews

Redman's provided excellent legal employment advice for me during a difficult time in my employment. Chris was my lawyer, super efficient, quick, reliable and clearly very experienced in the matter. Could not ask for a better law firm to deal with your query if you are in need of some help. Would definitely use them again in the future. Highly recommending Chris.

Posted 1 month ago

Steven

Chris Hadrill was very professional and responsive. I would highly recommend him

Posted 1 month ago

Dinah

Very Efficient, with very quick email reply’s. I had a matter that needed resolving within a very short space of time and Redmans Solicitors were great with dealing with my matter quickly.

Posted 1 month ago

Ankar

At Redmans the solicitor that was dealing with me was Chris. He dealt with my situation smoothly with clear guidance and explanation

Posted 1 month ago

Anonymous

Clear, concise advice and guidance delivered by an experienced and very capable solicitor, within the timelines required

Posted 2 months ago

Anonymous

Very efficient service. I never had to wIt for more than a day for a reply to any of my queries and the matter was dealt with swiftly.

Posted 2 months ago

Anonymous

Very timely, thorough and helpful advice. Friendly and considerate of the needs of the client

Posted 2 months ago

Anonymous

Very prompt and attention to detail. Thank you for the service

Posted 2 months ago

Chris

Couldn’t be happier with how Redmans successfully handled our seemingly tricky case. By being clear and detailed every step of the way, with the utmost professionalism and courtesy, they made it an informative and eye-opening process, taking the stress out of the situation and ultimately delivered what you would want from such a service. I fully appreciate everything they have done, and if I am ever in need of such services in the future, they will be the first number I contact. Excellent.

Posted 2 months ago

Anonymous

Excellent work delivered with great quality

Posted 2 months ago

Dominic

Chris Hadrill was a great help both in terms of his advice and his expertise. He explained my options to me clearly and concisely enabling me to quickly make the right decision for me in the circumstance. I would not hesitate to recommend Chris or Redmans to friends or colleagues, and would certainly make Redmans my first port of call should I require a similar service in the future.

Posted 2 months ago

Kurt

Redmans gave excellent advice and helped me understand everything in clear concepts. Thank you!

Posted 2 months ago

Anonymous

Resolved my issues

Posted 2 months ago

Keith

Quick fast professional service.

Posted 2 months ago

Michael

"Prompt, efficient and practical advice that resulted in me getting some additional money tax free."

Posted 2 months ago

Anonymous

Patient and thorough advice given to me around my Settlement Agreement

Posted 2 months ago

Anonymous

"Excellent service, getting back to you promptly giving you very good advice."

Posted 2 months ago

Anonymous

I found Chris Hadrill to be an excellent help, he is very knowledgeable and gives good ,concise ,strategic advice .He makes himself readily accessible when you need him.I would personally highly recommend him.

Posted 2 months ago

Christine

Professional, efficient and reliable service provided. I strongly recommend them and I would use this service again.

Posted 2 months ago