Employment Compromise Agreements

Redundancy – Are people receiving what they should be?

With so many local companies making staff redundant, how can they be sure that they will receive what they are entitled to without spending their hard earned money on expensive legal advice?

“This should not be a problem”, says Arthur Li, partner at Gray Hooper Holt Solicitors in Redhill. “Whereas many firms used to try and short change staff with redundancy payments, most will now not let a member of staff leave them without obtaining a signed Compromise Agreement from them. This document sets out the full terms of the settlement for both parties, but most importantly for the individual being made redundant, it ensures that they must obtain independent legal advice, and even better than that, their employer must pick up the legal bill”.

“No employee being offered redundancy in the current economic climate should be accepting it without a meeting with an independent solicitor to review the Compromise Agreement. This is vital as once the Compromise Agreement is signed, the employer cannot go back and ask for more, and in most cases they would not be able to take any further legal action through an employment tribunal or in any other court”, says Arthur Li.

Compromise agreements are recognised by statute and are the only way a redundancy can be legally binding without Employment Tribunal Proceedings. You may be entitled to claim an unfair dismissal for many reasons, but the most common reasons are:

• Failure by the employer to consult their staff about redundancies; and
• Failure to follow the correct redundancy procedures
• Failue to have a valid reason for the redundancy

“By obtaining independent legal advice you can explore all of the reasons for your redundancy, ensure that they are genuine, and most importantly be certain that you are obtaining the maximum amount of compensation that you are entitled to”, says Arthur.

A final word of warning is that Compromise Agreements can also be used to introduce restrictive covenants. These can have serious repercussions for anyone taking redundancy, as they might prevent the employee from:

• Obtaining a new job with any employer in competition with their current employer
• Obtaining a new job within a certain number of miles from their current employer’s location
• Poaching any clients or colleagues from their former employer

Arthur says, “With so few jobs available now, the last thing an employee being made redundant needs is to be restricted in their choice of future employment. Restrictive covenants can do this and therefore it is absolutely vital that anyone considering redundancy or a Compromise Agreement seeks independent legal advice to ensure that their rights are protected”.

Summary

Anyone considering redundancy under a Compromise Agreement must obtain independent legal advice to ensure that their rights are protected and they are receiving the right amount of compensation. In this recession they need to ensure that they are receiving everything that they are entitled to.

More Information?

For additional information contact Arthur Li on 01737 761004. Arthur Li specialises in Employment Law.

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