Wednesday, June 09, 2010

Compromise agreements

A view from a receiver. Now that it's over 6 months from my enforced exit from my ex-company, let me put something down about my views on compromise agreements in the hope that it might help others who get one of these pushed at them. I shall need to be careful in what I write here but I believe it to be important that various views are out there. This should, of course, not be taken as legal advice - as part of considering a compromise agreement you will need to get that anyway - it is purely a personal view and might well contain issues you might wish, if you are in a similar situation, to take up as part of your own legal discussions.
  • A compromise agreement is a document signed by both the employer and employee whereby the employee gives up rights to take any recourse to employment tribunals.
  • There are normally confidentiality clauses in the agreement restricting what can be said to third parties about the terms of the agreement and indeed whether the existence of the agreement is confidential.
  • The company will seek to get the compromise agreement signed between any redundancy announcement and your moving elsewhere. This is likely to put you under pressure, you need to take a long hard look at the terms. My view is that if you feel you have a good case in front of an Employment Tribunal you should be reluctant to sign the agreement in view of the, likely, restrictive terms. I wanted to get past this and 'get on with my life' believing that I was soon to find alternative employment. If you don't have an early return to work the terms of the agreement may make it difficult for you to discuss your situation with (for example) job counsellors.
  • The compromise agreement may enable your ex-company to ignore any bits of the relevant legislation which they have not already flouted - I suppose it depends upon your view of that and how much you trust your ex-employers.
  • As stated above, legal advice is a requirement for signing one of these, take your time with that, your ex-employers should be paying and you need to explore all options.
  • You need to look seriously at the payment your ex-employer is proposing to make and compare it (for example) with the legal fees they are stumping up to get the compromise agreement through. Are you worth more than however many hours of lawyers time your payment amounts to?

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