Compromise Agreement
When a relationship between an employee and employer breaks down irretrievably a compromise agreement can be the only way to deal with the situation and prevent a possible complaint to an Employment Tribunal.
A 'compromise agreement' is a legally binding agreement following the termination of employment. It usually provides for a severance payment by the employer, in return for the employee agreeing not to pursue any claim they believe they may have to an employment tribunal. Quite often, the compromise agreement will also deal with the notice element in the contract of employment and may provide for a "payment in lieu of notice".
Employers are now increasingly using compromise agreements as a mechanism for preventing possible future complaints to a tribunal, especially in redundancy situations.
Compromise agreements are recognised by statute and are the only way a claim can be legally binding without tribunal proceedings having been initiated.
Click here for our free Factsheet on Compromise Agreements. Alternatively, as we have extensive in drawing up and managing compromise agreement situations, then please talk to us.