A Compromise Agreement Can Cool Things Down

So one of your employees is leaving and not on good terms. You're a bit worried that you might end up facing them at an Employment Tribunal, but then you hear about a possible amicable solution - a compromise agreement...

A compromise agreement is one made without involving ACAS or a tribunal. Indeed, this is often to stop a case getting as far as a tribunal. But it has to meet all the legal requirements for it to be legally valid. This is a good initial guide to give you an idea:

- The agreement must be in writing. There is a very specific form of words that should be used in drafting a compromise agreement, that's why a skilled adviser will be reassuring.

- It's important that the agreement covers everything that has been complained about. Take care though, having a loose catch-all phrase won't be enough - make sure all the employee's complaints - or might complain about - is included in the compromise agreement.

- An employee signing a compromise agreement is entitled to independent professional advice from a solicitor. Normally you'll have to pay for this as an employer. But, why? Well, failure to do so could be interpreted as trying to prevent an employee from seeking independent advice... and it will help you. However, it's reassuring that this doesn't usually cost more than 𧺬.

- Check with your adviser he/she has appropriate professional indemnity insurance and that this person is identified in the agreement with their name and signature.

- The exact sections of law which the compromise agreement refers to should be listed. For example, 'a claim under Parts X or XI of the Employment Rights Act 1996'. Here again is where having an experienced compromise agreement solicitor will make your life easier.

Do you feel your stiff neck easing, the tension lifting? Well, a complicated and stressful process through a tribunal is not anyone's cup of tea - for the employer or the employee - so that odds that they will agree to sign a compromise agreement and come to an amicable solution are high. The solicitor will help you to understand all the important points and benefits this compromise agreement will bring you.

So enjoy the rest of the day and a good sleep tonight!


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Tim Bishop is senior partner at Bonallack & Bishop, a firm of lawyers with a team of experienced compromise agreement solicitors. Contact them for advice on your redundancy compromise agreement. Tim sees himself as a businessman who owns a law firm and has grown the firm by 1000% in 13 years, with plans to extend further.