What is a compromise agreement and what protection does it give you?

It’s unfortunate when workplace disagreements happen. The environment which you work in is one of the most important factors for job satisfaction, so once this is tainted it can be difficult to continue working for your employer.

On the other hand you may not have had a choice in the matter and been let go due to an issue your employer has had with you or your performance in the company. Whatever your situation, if you believe that you have been mistreated you probably feel angry, upset and want your employer to be punished.

It’s likely that the company would have discussed the situation and knows whether they are in the wrong or not. If there is a chance that you could bring legal action against them, you may find yourself being offered a compromise agreement.

What is a compromise agreement?

A compromise agreement is a legally binding contract which, in most cases, means the employee will end up being given a cash lump-sum in return for agreeing to not taking any further action against the company.

They can only be brought about during or following termination of employment; usually when there are certain circumstances that could have led to legal action for the way the employment ended. Some examples of when a compromise agreement may be offered include wanting to remove an employee due to poor performance, during periods of redundancy or to remove certain members of staff without creating any further embarrassment e.g. directors and managers.

It’s likely that to agree to the compromise agreement you will need to sign official documentation that would prevent you from ever changing your mind and bringing the company before the court in an employment tribunal.

What are the advantages?

The obvious benefit to accepting the compromise agreement is the lump-sum of cash that you would receive. In a report compiled by the Chartered Institute of Personnel and Development in 2011 stated the average pay-out accepted by an employee was £10,000, though all cases are different. Receiving a large payment upfront would allow you to weigh up your options, take a few months off if you wish, or if you found a new job elsewhere relatively quickly then you would have gained a nest-egg towards your savings.

The other advantage to accepting a compromise agreement is the time and hassle you would have saved in preparing for an employment tribunal – an event which can be emotionally draining for both you and your loved ones. Generally, as a way of persuading you to accept the agreement, the employer will also offer to pay for your solicitors costs.

Getting legal advice

Of course the main issue with accepting the compromise agreement that is presented to you is that you could end up with a bigger compensation pay-out if you took the case to the courts. The company will be fully aware of this and are always likely to offer you far less than they may potentially have to pay you if you were successful at an employment tribunal.

Compromise agreements also contain a lot of legal jargon, so it is important that you make contact with a good solicitor to look over the details of what has been offered to you. A good solicitor may be able to deal with your employer to ensure to negotiate a higher payment than has originally been offered. They can present them with benefits such as saving them time and money, along with the fact that they will lessen the damage to their reputation on the chance that their business could be brought into disrepute in a legal trial.

We have many years’ experience in advising employees on their compromise agreements. Our friendly team will help guide you through the entire process, ensuring you are confident that your case is in the very best hands to reach a successful conclusion. At QualitySolicitors, we’re very experienced in handling compromise agreements. And we’re  always available to deal with any questions you may have, giving you peace of mind.

To help you resolve your dispute, and to talk about Compromise Agreements, contact your local QualitySolicitors branch.