A UK compromise agreement is a formal contract created between an employer and employee in settlement for termination of their employment.
The agreement is a 'compromise' of terms between the employer and employee. It will normally include a compensatory payment and a list of termination clauses. These provisions make sure that the agreement is final and therefore no future legal proceedings can be brought, such as the employee looking for more compensation at a later date.
Why would I seek a compromise agreement?
Your employer has to abide with employment law which, means that they cannot merely 'contract out' from providing employee rights. In light of this, a compromise agreement provides a solution to ending an employment relationship amicably.
When both parties sign a compromise agreement, neither is then able to start legal proceedings at an employment tribunal. Due to the importance of such an arrangement, it is always advisable to seek professional legal advice before entering into such a contract. A solicitor expert in negotiation skills will make sure that any settlement amount offered is reasonable and fair according to your circumstances.
Who pays for a compromise agreement?
Usually an employer will cover the costs of creating a compromise agreement. Your Solicitor will normally invoice the employer direct for the costs of drawing up such an agreement (costs usually estimate around