What is a compromise agreement?

A compromise agreement is an agreement between an employee and an employer. It sets out the terms on which the employee will agree not to pursue a claim against the employer. 

The law states that individuals cannot generally contract out of their employment rights. There are however a few exceptions to this rule.  One of those exceptions is where a settlement is reached by way of a compromise agreement.

It is essential that employees fully understand their employment rights before contracting out of them. This is why the law requires employees to obtain legal advice from a qualified legal adviser, such as a solicitor.

Employers often provide compromise agreements to employees in redundancy situations. This is because it is a legally recognised and safe way of terminating someone’s employment.  A compromise agreement minimises the risk of complications or problems and brings the employment to an end neatly.

You will need advice on whether to sign the compromise agreement and what your options are if you do not sign it. Often, we are able to negotiate a more favourable package for you.

Contact one of our employment law specialists today for advice on your compromise agreement.