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How to negotiate a compromise agreement
Posted by David Cant on August 22, 2012
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The termination of an employment relationship can be a long process, particularly when grievances from the employee feature in the process. In such instances, employers sometimes offer employees a compromise agreement, in order to avoid long and expensive judicial proceedings, which risk tarnishing a company’s reputation.

Your rights and a Compromise Agreement

Compromise agreements, which are also referred to as settlement agreements, have increased in popularity in recent years and their use is becoming ever more widespread. The main reason for this is that they are, compared to the employment tribunal route, a less cumbersome way of resolving a workplace dispute. They also allow the employee and employer to solve the dispute in a less confrontational setting than the courtroom.

When are compromise agreements available?

A compromise agreement is reached during, or after, the termination of an employment relationship. Compromise agreements have serious consequences for employees, and are legally binding on both parties. With this in mind, it is crucial that both parties get expert legal advice.

For an employee, agreeing to a compromise agreement means that they effectively waive their statutory right to claim for unfair dismissal or redundancy payment. In exchange, the employer commonly pays the employee a financial sum, which is called a severance payment. Compromise agreements are statutory recognised and cannot be altered once entered into, unless the conformities for its creation have not been complied with.

How can I ensure that my interests are included?

Because compromise agreements essentially hinder them from lodging a grievance in front of an employment tribunal, employees are required to get legal advice. If such advice is not taken prior to the agreement being signed, it will not be legally valid. Hence, finding a solicitor who can give you the best legal advice is crucial. Contact Law can help you to find a lawyer who has wide experience of settlement agreements and operates near you.

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Director at Veritas Consulting. The SME's favourite go-to consultant for health and safety know-how. Bucket loads of experience. Fluent in practical advice. Solutionist with a brain you can pick.

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