Compromise agreements

A ‘compromise agreement’ is a legally binding agreement following the termination of your employment. It usually provides for a severance payment by your employer, in return for which you agree not to pursue any claim you may have to an employment tribunal. Quite often, the compromise agreement will also deal with the notice element in your contract of employment and may provide for a “payment in lieu”.

Employers are now increasingly using compromise agreements as a mechanism for preventing possible future complaints to a tribunal, especially in redundancy situations. Compromise agreements are recognised by statute and are the only way a claim can be legally binding without tribunal proceedings having been initiated.

You must have the compromise agreement explained by an independent solicitor before the agreement becomes binding. The solicitor giving the advice must also sign the agreement and certify that the appropriate advice has been given.

A ‘compromise agreement’ is a legally binding agreement following the termination of your employment. It usually provides for a severance payment by your employer, in return for which you agree not to pursue any claim you may have to an employment tribunal. Quite often, the compromise agreement will also deal with the notice element in your contract of employment and may provide for a “payment in lieu”.

Employers are now increasingly using compromise agreements as a mechanism for preventing possible future complaints to a tribunal, especially in redundancy situations. Compromise agreements are recognised by statute and are the only way a claim can be legally binding without tribunal proceedings having been initiated. You must have the compromise agreement explained by an independent solicitor before the agreement becomes binding. The solicitor giving the advice must also sign the agreement and certify that the appropriate advice has been given.