Why do I need a compromise agreement?

The law does not allow employees to contract out of their employment rights, except in specified circumstances. These circumstances are as follows:-

• Where a settlement is formally endorsed by an Employment Tribunal;

• Where an agreement has been reached with the help of an ACAS concilation officer;

• Where the agreement is incorporated into a compromise agreement

A compromise agreement is usually the quickest and most cost effective means of concluding a settlment. It is beneficial both to you and your employer.

The benefit to you is that you have a legally binding agreement that your employer will pay you a sum of money by way of compensation for losing your job. It is much quicker and less stressful than pursuing a claim in an Employment Tribunal. It also avoids the risk of a claim being unsuccessful.

The benefit to your employers is that the compromise agreement brings any potential dispute to a conclusion and they are protected from any future employment related claim.