With many employers cutting jobs at present there has been a lot of talk about Compromise Agreements in the press. Such an agreement can provide an attractive solution for employer and employee alike. However, if handled badly, it can be an extremely damaging process.

Pickerings Employment team have many years experience in advising both employers and employees on Compromise Agreements, so we are well aware of the potential pitfalls.

So whether you are an employer making redundancies and concerned that you may need to put a Compromise Agreement in place, or an employee who has been offered a Compromise Agreement, we can help.

What is a Compromise Agreement?

It is a legally binding agreement in which the employee surrenders his right to pursue a claim he might have against the employer, usually in exchange for a payment.

The Compromise Agreement must be in writing.

It must relate to a particular complaint or proceedings.

The employee must receive legal advice from a relevant independent advisor regarding the terms and the effect of the proposed Compromise Agreement. In particular, the employee must be advised about his ability to pursue his rights before the Employment Tribunal after he signs the Compromise Agreement. If the employee signs the Compromise Agreement without being advised about its effect first, the Compromise Agreement will not be binding.

The independent advisor must be insured against the risk of a claim for loss arising in consequence of the advice.

The Compromise Agreement must identify the advisor.

The Compromise Agreement must state that the conditions regulating compromise agreements under the relevant legislation are satisfied.

(For ease of reference we use the terms ‘he’ and ‘his’ to refer to all employees.)

For detailed advice, contact Simon King on 01827 317071.