This article sets out the use of a compromise agreement from the perspective of an employer and employee.
Employer
If you are an employer and have decided to let a member of staff leave your organisation you must be very careful not to contravene any employment laws relating to dismissal.
One way of alleviating any concern is to agree a compromise or a ‘settlement’ with your employee. Once agreed it is vital that you have this arrangement expressly detailed in a contract – also known as a Compromise Agreement.
This document will set out exactly what has been agreed. It will also bar your former employee from taking any legal action against you in relation to their dismissal.
Employee
If you are an employee and have been offered a sum of monies before leaving your employment you will be asked to sign a compromise agreement. This will set out what you are going to be paid and what rights you will be forfeiting upon receipt of these monies.
As part of the legal process you will be asked by the Solicitor for your employer to have the agreement checked by an independent Solicitor so that you can be given advice on the suitability of the agreement.
It is vital that this is done as any issues between you and your employer must be dealt with at this stage. It is important that the agreement is not against your best interests and that you are getting what you deserve.
In most cases the employer will pay your legal fees.
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