As employment solicitors we often advise on Compromise Agreements. Most employees will not have heard of a Compromise Agreement before, let alone seen one and will probably wonder what a Compromise Agreement actually is.
Compromise Agreements are used when an “exit package” has been agreed. This usually happens in redundancy situations or when an employment relationship has broken down. Under the Compromise Agreement an employer will pay the individual an amount and, in exchange, the employee will agree not to bring any employment related claims against the employer.
A Compromise Agreement can also be used to deal with other parts of an “exit package” such as the employment reference, confidentiality provisions and what will happen to property the employee may have, such as a work mobile telephone or laptop.
A Compromise Agreement will only be legally binding if a solicitor has advised the employee on the terms of the Agreement. Because it is necessary to receive advice from a solicitor employer will normally make a contribution towards the solicitor’s fee.
If you would like further advice on a Compromise Agreement, please contact Helen Phillips.