“Fiona bought closure to my ongoing Compromise Agreement. She was genuinely interested in helping and gave expert, professional and easy to understand advice. She also pointed out and resolved other issues I had not thought possible.”
‘Jonathan’, Compromise Agreement Client
Compromise Agreement Solicitors
Compromise Agreement advice for Employees
What is a Compromise Agreement?
A Compromise Agreement between employer and employee is a legally binding settlement (sometimes referred to as a termination settlement or a settlement agreement), usually offered shortly before or after the termination of employment. You will be required to waive your right to bring legal claims such as unfair dismissal or workplace discrimination in return for an agreed sum of compensation.
If you have been offered a Compromise Agreement, your employer has to make sure you receive independent legal advice before signing, otherwise the agreement will not be enforceable. The reason behind this is to ensure you fully understand the implications of entering into this agreement.
Your Compromise Agreement may be a positive step forward for you. However, you may have been offered a Compromise Agreement totally ‘out of the blue’ or in circumstances where you do not feel you have any choice but to sign.
We always take the time to listen to you to find out the background to the offering of this Compromise Agreement in order to properly advise you as to whether it is in your best interests to sign. In certain cases we may be able to negotiate a larger sum of compensation and/or better terms including a positive reference.
Alternatively, we may advise that you would obtain a much better settlement by lodging or continuing with a grievance, capability or disciplinary process or even commencing Employment Tribunal proceedings.
What are the benefits of signing a Compromise Agreement?
- Employment Compromise Agreements allow for a clean break in your employment relationship;
- They can be a speedy, efficient and pragmatic way of receiving an enhanced settlement payment;
- It allows you to circumvent formal procedures such as a capability, disciplinary or redundancy process or face the expense and uncertainty of issuing Employment Tribunal proceedings.
- You will have complete peace of mind as you will not have promised or warranted to do anything which might mean you are in breach of contract.
- An expert solicitor will check that the sum of money you are receiving is fair compensation and, if not, you will be given assistance in negotiating a higher sum.
What are the risks of signing a Compromise Agreement?
- You may be agreeing to terminate your employment for a much lower amount of compensation than you would be entitled to were you to refuse to sign and instead make a formal claim against your employer;
- You will lose the opportunity to keep your job by going through, or continuing to go through, a fair workplace procedure such as a capability, disciplinary or redundancy restructure process;
- You may be required to enter into new contractual terms which will affect your ability to work in the future, such as new post-termination restrictions;
- You may be entitled to a larger compensatory amount merely by negotiating on whether tax is payable;
- You may be signing away important contractual benefits such as your right to Permanent Health Insurance or a final salary pension.
How much will it cost?
Your employer should have included a clause in the Compromise Agreement which sets out a fixed contribution towards the cost of you obtaining independent legal advice. In straightforward cases, this contribution should be enough to cover all of your legal costs. If it is not, because your Compromise Agreement needs amendments, then we would always return to your employer to ask for a higher contribution. However, in cases where we need to negotiate a higher amount of compensation on your behalf, you will be required to contribute towards your own legal fees.
Where negotiations break down, we may be able to offer a no-win, no-fee agreement (sometimes called a Damages Based Agreement), which is where we receive a percentage of any compensation you receive as a result of taking further action. This may include bringing a formal grievance or issuing proceedings.
How we will help
Our Compromise Agreement solicitors will advise on the fairness of the sums offered, the tax implications and ensure any references to be provided are accurate and legally compliant.
If you are considering signing a Compromise Agreement please contact us. We are more than happy to have a free initial chat with you to point you in the right direction. The contribution provided by your employer will ensure that we are able to fully assess your situation. In the event of the employer’s contribution being inadequate, we offer the first hour of the consultation at our initial discounted rate.
At the first meeting we will be able to advise you as to whether the compensation offered by your employer is fair. For example, if we believe you have a claim such as a workplace discrimination or unfair dismissal claim, we will assess its potential value. We will also consider whether the terms of the Compromise Agreement are reasonable. We will also provide guidance on the tax implications of the figures put forward in the Agreement.
We recognise that it is always your decision as to whether you sign or not. Our written advice will mean you are able to make an informed decision about how you wish to proceed.