What is a compromise agreement?
A compromise agreement is often used by an employer to formalise the employee’s termination of employment. Most frequently, compromise agreements are used when an employee is being made redundant or when an employer may be facing a possible claim by an employee.
The compromise agreement will typically set out the financial compensation that will be paid to the employee, in return for which the employee will agree not to bring a claim against the employer before the employment tribunal, it is for this reason that employer’s when faced with a possible unfair dismissal claim will often put forward a compromise agreement as a way to end the employee’s employment.
Compromise agreements are recognised by statute, with certain payments under the agreement tax free up to £30,000. Given the significance of a compromise agreement, a number of formalities must be complied with most notably, the employee will need advice from an independent solicitor who will need to certify that the employee has been given the appropriate advice on the agreement and the options available.
More about Compromise Agreements...
- What is a compromise agreement?
- Usual terms of a compromise agreement
- Compromise Agreement: How much should I get?
- Is the compromise agreement compensation negotiable?
- Compromise Agreement: How much will it cost me?
- Redundancy Compromise Agreements
- Compromise Agreement Tax
- Compromise Agreement Signing Urgently by a Solicitor