Employment Compromise Agreements

Should you sign an employment compromise agreement?

If you have been asked by your employer to sign an employment compromise agreement, what should you do? Should you accept what they are offering you to leave their employment or should you seek compensation? The purpose of this article is to understand the purposes of an employment compromise agreement and to explain whether you should sign one.

Should You Sign?

Initially, the answer should be no. Unless you have taken completely independent legal advice to explain all of your options and to review the offer made you should not under any circumstances sign a compromise agreement.

The purpose of a compromise agreement is to prevent you from making any claim against your employer after you have left them. Therefore, if you sign a compromise agreement and subsequently discover that your employer has offered you less in settlement than you are entitled to you would not be entitled to turn and seek further compensation.

Therefore, it is imperative that you seek expert legal advice to ensure that the offer being made to you is fair and reasonable in terms of both the length of time of your employment and the reasons for your dismissal (leaving your current employer).

When Are You Likely To Be Offered An Employment Compromise Agreement?

You will usually be asked to sign one of these when your employment is being terminated for reasons of redundancy, dismissal or by mutual agreement. Your employer wants the certainty that the offer in settlement of any claims you make against them is fair and reasonable and that you cannot subsequently claim further compensation. This is why your employer is always keen to obtain a signed compromise agreement.

Who Pays For The Advice?

The good news with compromise agreements is that your employer will offer to pay your reasonable legal fees. Most compromise agreements will stipulate a certain amount to pay for legal advice and usually this will be enough to cover your own solicitor’s legal costs.

You will arrange a meeting with your solicitor who will discover all of your terms of employment. He will review your employment contract along with any further letters regarding your employment and will listen to your reasons for the agreed departure from your current employer. He will then assess the amount of compensation you would be entitled to if you made a successful claim for employment compensation, and will then be able to advise you whether the offer made is reasonable.

Sometimes your solicitor will negotiate an increase on the offer obtained in the compromise agreement and then advise you to sign it.

Before you have obtained this legal advice you should not sign a compromise agreement.

Summary

A compromise agreement, once signed, is a binding agreement that you have accepted an offer in settlement of any employment claim against your employer and you will not subsequently seek further compensation. It is vital that you should only sign an employment compromise agreement once you have received independent legal advice.

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