Five FAQs on compromise agreements


How are compromise agreement used?

If you have a dispute with your employer which end in you taking your case to an employment tribunal, a compromise agreement might be offered to you by your employer. This legally binding agreement lays out the terms under which you would drop your case against your employer. As this document is legally binding for both parties, it should be thoroughly assessed by an independent employment law solicitor on your behalf.

How much would I be paid to accept a compromise agreement?

The actual amount of money is negotiable with your employer, which is one of the reasons the services of an employment law solicitor could be highly advantageous. There is a £30,000 threshold that is used, as payments above this amount would mean deductions would have to be made. Your employment lawyer can explain how these payments might impact on your tax situation.

What are the main components of the compromise agreement?

The agreement you would sign sets out the terms by which you would drop your case. These terms often include clauses preventing you from contacting the media or talking about the dispute with any third party. Your employment law solicitor can assess the terms and advise whether they are in your best interest.

Does an agreement have to be specific to my case?

Yes, and this is one of the most important aspects of a compromise agreement. It should be written to only apply to the dispute you are currently involved in. Your employer cannot use the agreement to cover other disputes you may also have with them. Your employment law solicitor can ensure that your compromise agreement is written correctly before you sign.

What services can a solicitor offer me with compromise agreements?

You should not accept a compromise agreement without it being checked by an employment law solicitor; in fact, it will not be considered legally binding unless a solicitor has checked it on your behalf. As the agreement is legally binding on all parties, it is vital that you understand your responsibilities before you sign. Your solicitor can also help you negotiate with your employer for the amount of money that will be paid in order for you to accept the compromise agreement being offered.

If you would like to obtain legal advice on compromise agreements, Caven can put you in touch with a local employment solicitor free of charge. So, if you have any questions or would like our help in finding local employment solicitors please call us on 08001 221 2299 or complete the web-form above.

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