Employees and workers are often offered a compromise agreement if their employer might have breached their workplace rights, typically by unfairly dismissing them and/or by discriminating against them. The compromise agreement often states that the employee’s contract of employment will be terminate on account of their signing of the compromise agreement, and in return the employee or worker will receive consideration (compensation) for doing so.

Compromise agreements are not controversial but they can occasionally turn out to be so. If the the compromise agreement does not suit the employee or worker then they might wish to look at alternatives to signing the compromise agreement, whether or not the agreement will entail them terminating their employment. This post examines the options that an employee might have to make if they are unsatisfied with the idea of signing a compromise agreement or particular terms of the compromise agreement do not suit them.

Aversion to the concept of a compromise agreement

Some employees do not like the idea of waiving their workplace legal rights. This is understandable in certain situations, for example if the employee or worker has been sexually harassed or discriminated against and thinks that the concept of signing a compromise agreement demeans them. If an employee simply does not like the concept of compromising their workplace rights by signing the agreement then they have a number of options:

Do nothing
Litigate against their employer

The two above choices are normally really the only recourse if the employee disapproves of the concept of waiving their rights. The employee can either do nothing – disregard the possibility of entering into a compromise agreement and take the matter no further – or litigate against their employer. Generally, it is recommended that the employee does not blanket-refuse to sign a compromise agreement – litigation is a process fraught with risk and the disadvantages of doing so must be balanced against the benefits looking at the particular facts. However, should the compromise agreement offer insufficient compensation for the nature of the violation of the employee’s rights then litigation can be the best way to proceed. Negotiation is normally strongly recommended beforehand, though.

Disagreement with particular terms of the compromise agreement

Should the employee or worker disagree with specific terms of the compromise agreement then this obviously creates more room for maneuver for both the employee and their representative, should they have such. The options for the employee in such circumstances are:

Accept the compromise agreement as it is; or
Negotiate the terms of the compromise agreement; or
Reject the compromise agreement and commence litigation against their employer

The first option evidently is not preferable for the employee in the majority of circumstances if they’re dissatisfied with the terms of the compromise agreement. However, if an employee disagrees with trivial terms of the compromise agreement (for example, they wish to leave their employment one day before the specified date) but the over-all terms of the agreement are advantageous to the employee then it may be recommended that the employee is flexible in their negotiating stance so that an the matter can be settled. If terms of the agreement which are of distinct significance to the employee are disagreeable then it is not advised that the employee enter into the agreement, although this depends on the particular facts of the case. An obvious thing to consider is the strength of the legal position of both parties.

Negotiation of the terms of the agreement is almost always recommended, unless both parties are happy with the terms of the contract. Careful examination of the compromise agreement and miscellaneous contractual documents (such as the contract of employment, restrictive covenants etc.) is always required to determine whether unreasonable burdens are being placed on the employee and to ascertain that the terms of the agreement are not unfavourable to the employee.

As above, rejection of the compromise agreement and recourse to litigation through the Employment Tribunal or civil courts is not a decision that should be taken lightly. The benefits of the compromise agreement (speed of payment, finality etc.) should be weighed against the advantages of litigation (potential satisfaction for the client, amount of compensation etc.)

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

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