Gardner Leader

Compromise agreements

It is very common now for employees who leave their employment in circumstances where they might be able to make a claim against their employer to be offered a sum of money as a termination payment. As a condition of the offer, they will be asked to sign a compromise agreement setting out the terms of the settlement.

A compromise agreement is one of a very limited number of ways in which an employee can validly sign away their statutory employment rights. As such, it has to meet certain requirements in order to be valid. One of these is that the employee has to take – and the agreement has to record that he or she has taken – independent legal advice.

The basic effect of a compromise agreement is that in return for the payment (or whatever terms of settlement the employer is offering) the employee agrees not to make any further claims against the employer. Often there will be other terms such as confidentiality undertakings as well. For our more detailed guide to the contents of compromise agreements click here.

We see many employees to go through compromise agreements with them. Many are already happy with what is on offer and only need to ensure that the agreement reflects what they are expecting. Others are still distressed by the termination of their employment and do not know whether they should be accepting the offer or not We can help the employee to consider what claims they might otherwise be able to make and whether the terms offered are a suitable settlement.

If you have been asked to sign a compromise agreement, please call us and we will be happy to help.

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