FAQs about Compromise Agreements

Compromise Agreement FAQs – Employment solicitors Watford

Why should I use a compromise agreement ?

Compromise agreements are used in Watford where the employer wishes to terminate an employee’s employment and also where the employee has a possible legal claim against the employer.  They are commonly used for :

  • Redundancies
  • Employees who leave the organisation due to unresolved workplace issues
  • Employees who are not well enough to work
  • Employees who have decided not to return to work following maternity leave

There are many benefits of compromise agreements, including:

  • Certainty – a compromise agreement creates a clean break in the employment relationship and both parties can move on without issue.
  • Saved money and time – legal disputes can be expensive and time consuming, especially given the fact that employers cannot claim back their legal costs irrespective of whether the employer wins.

How can I make sure the employee does not disclose the content of the agreement to others ?

You can ask the employee to sign a confidentiality clause as part of the compromise agreement.  There are two broad possibilities for the way the confidentiality agreement can be drafted, or adopt a “belt and braces” approach by incorporating both

  • Existence – you could ask the employee to not reveal the existence of the agreement to anyone bar close family members.
  • Content – you could ask the employee to not disclose the content of the agreement to anyone.

What claims will Watford Solicitors ensure that the employee waives ?

The vast majority of employment law related claims will be waived.  Employers cannot, however, force employees to waive their right to:

  • Pursue personal injury related claims
  • Pursue claims under the Equality Act 2010

How much should I offer in the compromise agreement ?

The package you should offer is not set in stone.  Watfpord compromise agreement solicitors can advise you on the lower and upper amounts generally offered in the circumstances applicable to you.  However, you should bear in mind that to sufficiently induce the employee to accept the offer, you should offer more than required by statutory standards, such as statutory redundancy pay, for example.

What should I advise my employee to do upon receipt of a compromise agreement ?

You should advise the employee to seek independent legal advice, as without legal advice the agreement will be considered null and void by law.  Independent legal advice can come from anyone not connected to your business in any way, which could include:

  • Registered Trade Union officers
  • Solicitors
  • Advice centre workers (such as the Citizen’s Advice Bureau)

Will I have to pay for my employee’s legal costs ?

Whilst there is no law requiring you to pay for your employee’s legal costs, it is commonplace for employers to do so.  As a rough idea, the usual contribution by employers is around £250.00 plus VAT, whioch usually covers the employee’s costs.

Please contact Watford employment lawyers for further cost effective assistance with compromise agreements.