Well, you can't please all of the people all of the time. The same goes for employer/employee relations. Sadly there are times when not all goes smoothly and employment, for whatever reason, needs to be terminated.
The circumstances might be perfectly amicable or they could be contentious. Redundancy, in particular, is often the reason for making a compromise agreement. The main point of the agreement is that when an employee leaves the company, the parting can be achieved with employment ending on agreed terms.
Protection is obtained for the employer through a well drafted compromise agreement and this is why is it so valuable. Any further future claims the employee could otherwise make will be prevented. This of course is a great peace of mind for the employer; it means a former employee cannot start bringing claims against an employer in a court or tribunal.
A compromise agreement can be offered to a departing employee, before they leave, or after employment has been ceased. The important thing to get right at this stage is to insert the words: Without Prejudice. Sounds a little fierce? Well, it isn't because if the compromise agreement is not accepted, it means the terms of the agreement cannot be used as evidence in any later proceeding.
This might be beneficial for the employer but really both parties should be protected? Yes! That's another main reason for these compromise agreements.
An employee has the certainty of a settlement sum. It is usual for the employee to enter into the compromise agreement to obtain these costs. It is normally the case that the employer will pay the employee's legal costs for entering into a compromise agreement, this can be limited to a specific amount. In doing this, it makes sure that the employer is treated fairly and the employee does not start making ridiculous demands. So that the dispute is settled legally and to avoid any future complications, it is sensible that the employer thinks of a reasonable payment figure for the employee.
Drawing up a legal compromise agreement is a sensible decision; it offers a simple precaution, avoiding costs of tribunal proceedings that could occur at a later date.
To be valid, a compromise agreement must be in writing and specify the claims being settled. In addition, the employee should seek independent legal advice from specialist compromise agreement solicitors. These solicitors will advise on the terms of acceptance and check that the conditions which regulate compromise agreements are satisfied.