Compromise Agreements

What is a compromise agreement?
A compromise agreement is a document that employers may present to their employees for signing. In order to be legally binding, the compromise agreement must be counter-signed by a solicitor advising the employee and who is independent of the employer. The employer will normally pay all or part of the employee’s legal fees incurred in receiving the legal advice. The compromise agreement often offers an employee an amount of money over and above contractual obligations. This money is offered in return for the signing of the compromise agreement. The wording in the compromise agreement means that the employee is signing away any potential claims they may have against the employer as a result of the employer’s actions or dismissal.

A compromise agreement is a very important agreement. Once signed the employee would not normally be able to complain about any treatment he/she had received from the employer.

In fact, compromise agreements can be very positive, provided the terms offered properly compensate you for loss of office and any potential claims.

However, compromise agreements can sometimes contain terms that appear unfair or simply offer to honour the contract of employment and no more.

If presented with a compromise agreement, you must see a solicitor who is independent of your employer immediately. It is important that you ensure that the solicitor specialises in employment law, as some of the issues arising in compromise agreements can be complex. It is very important that the circumstances behind any departure from the company or dismissal are explored and balanced against the amount of money being offered. If the amount of money does not properly compensate you, it would be necessary for your solicitor to negotiate terms with your employer. In some circumstances, you may be advised to refuse to sign the compromise agreement and consider pursuing employment proceedings.

Our approach
We approach each situation with sensitivity and ensure that the client is fully informed of their potential claim and circumstances, prior to signing the compromise agreement. We do not simply accept the terms originally offered by the employer and regularly negotiate further payments where appropriate.
We are always independent of the employer and act in YOUR best interests even though the employer may be paying the legal costs, and even where the employer may have passed you our details.
If, after discussing the situation, we feel that the client has not been properly compensated, we will assist the client in pursuing matters to an employment tribunal.

We have an extremely successful history of negotiating successful terms in compromise agreements. We advise employees at all levels including some of the country’s senior executives and directors. Our employment lawyers have been involved in negotiating very substantial compromise agreements.

Compromise agreements are not just about the amount of compensation on offer. Factors such as confidentiality, references, share schemes and other savings plans, restrictive covenants (e.g. preventing employees from working for a competitor) are all highly relevant when employment ends.

Costs
We will always seek to ensure that the employer pays for all or part of the employee’s legal fees.