Employment Law Case Study: £8,000 Compromise Agreement Increase

Summary

How Fiona Martin secured an £8,000 Compromise Agreement compensation increase, a glowing reference and changed the termination reason to redundancy to ensure a client could claim on mortgage protection insurance.

Situation

Raj had worked for a large company for more than 12 years and had a glowing work record. However, when a new line manager joined Raj found he was continually undermined.

Raj raised his concerns with HR on several occasions but they were ignored. Despite the seriousness of his allegations, HR did not begin a formal grievance procedure.

When Raj’s situation became untenable he threatened to resign. At this point his employers offered a Compromise Agreement with contractual payments plus an ex-gratia payment of £22,000. The reason given for this severance was ‘by mutual agreement.’

What martin searle solicitors did

When Raj consulted us as the independent legal adviser needed to sign off his Compromise Agreement we advised that the company was guilty of serious fundamental – or repudiatory – breaches of contract. Although his employer had offered seven months’ pay as compensation, we advised that there could be a case for obtaining a larger sum.

Fiona advised that if Raj raised a formal grievance his employer would find it difficult not to uphold his well-documented complaints. This in turn could have led to the company having to take disciplinary action against this senior manager. On the other hand, if Raj’s grievance was not upheld, he would have no option but to resign and claim constructive dismissal and his compensatory award could be higher than seven months’ pay depending on whether he obtained another similar job in the near future.

Given the circumstances, we advised Raj that his employer might be willing to increase the compensation sum to avoid managers spending considerable time hearing his grievance.

With Raj’s agreement, Fiona contacted the company advising that her client was going to raise a formal grievance and asking for an additional compensatory payment and a reference over and above the usual basic reference the company usually provided. In addition she asked the company to change the reason for dismissal to redundancy so Raj could claim on his mortgage protection insurance if he could not find suitable alternative employment after his notice period.

The result

The company raised its offer by £8,000 and amended the agreement to give the reason for severance as redundancy. It also provided a glowing reference to help Raj find a suitable job as soon as possible.

Find out more about how we can help with Compromise Agreements as well as our compromise agreement employment law service for employers and trade unions with multiple sign-offs.