Compromise Agreeements

A Compromise Agreement is a formal document under which an employee agrees to waive statutory employment rights and claims that they may have against their employer or former employer.

Compromise Agreements are a useful means of achieving a clean-break with an employee, either where the relationship with the employee has run its course for whatever reason, or where the employee has raised or threatened to raise particular claims.

In these circumstances, as an employer, it can make commercial sense to pay more than strictly necessary to the employee, in return for the comfort of knowing that you will not be hearing from that employee again.

Some employers rely on a handshake, goodwill or a simple written statement in a letter that an employee will accept a pay-off in "full and final settlement" of any claims that the employee may have.

Similarly, many employers believe that talking "without prejudice" or "off the record" to an employee, in terms that it may be a good idea if they part company, means that they are immune from risk.

In either case, a mistaken reliance on an informal settlement arrangement or on the blanket "without prejudice" label can lead to problems and potential liability, which could easily be avoided with our expert advice.

Whatever the circumstances, whether it be a means of disposing of a very real risk of liability, or simply an entirely amicable parting of the ways, we can assist with the process of introducing, negotiating and drafting a Compromise Agreement, to afford your business the best possible protection.

Our Compromise Agreements can be tailored specifically to your needs, and deal with such additional considerations as garden leave, business protection and restrictive covenants, future assistance and employer property, in addition to the incorporation of best practice in dealing with the key waiver of claims by the employee and protecting you from unnecessary exposure to additional tax liability.