Have you heard of Compromise Agreements?

Compromise Agreements

Heard of Compromise Agreements? The chance is you have probably never.  Not unless you were being made redundant. The idea of a Compromise Agreement came about in 1993 and is being used more and more today as recession takes its toll.

Most employees have never heard of Compromise Agreements unless they were about to lose their job usually through redundancy. Compromise Agreements however, are legally binding agreement in the UK. The agreement is between the employer and the employee. The agreement is a statement about terms and conditions for which is binding to fulfil certain legal requirements.

The Compromise Agreements is only legally binding when the employee has sought independent legal advice. This is a legal requirement for the CA for it to be effective. Legal advice could be through a professionally qualified solicitor or a trade union representative or advisor. You will find that the employer will be happy to pay towards the costs of obtaining a legal help. So you will not be out of pocket in this sense.

It is very important to understand that once you sign into the Compromise Agreements your rights' are somewhat limited to null. This in effect will prevent you from bringing a case or claim against your employer in court or via the employment tribunal. There are settlement terms within the Agreement and will include payments of redundancy, any unpaid wages and any other financial settlement that you and the employer agree to at the time.

The agreement may also include a clause that protects the employer from being put in a bad light by the employee. So if for example, the employee sought to speak to the press / media. Currently, employers can receive a maximum of up to £30.00 in redundancy money this is usually tax free.

Make sure you understand the implications of signing the Compromise Agreements.