Compromise Agreements – A Clean Break After Redundancy Or Dismissal


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Increasingly, companies are making use of compromise agreements - sometimes for redundancy but most frequently in situations where an employee is being dismissed. The ‘agreements’ are legally binding; normally this is desirable for the company as it prevents the person being dismissed from pursuing a case with an Employment Tribunal. In most cases if you have to sign a compromise agreement there will also be some kind of severance payment as a form of compensation.

Often people might see compromise agreements as beneficial to the company rather than the worker, but if you have been approached to sign a compromise agreement there is no reason you should see this as a bad thing. Whether the agreement is a result of a dismissal, redundancy or general breakdown in the relationship between you and your employer there are plenty of reasons why a compromise agreement could work to your advantage.

You don’t have to wait months for an Employment Tribunal

Unfortunately lots of people have to go to court to solve their grievances with their old bosses. When this happens they will generally need to consult an Employment Law solicitor and because of this, it can take a long time to actually resolve complicated cases like unfair or constructive dismissal. By signing a compromise agreement you can get a quick resolution rather than waiting for the tribunal process.

Saves you emotional turmoil

If you do decide to go to an Employment Tribunal, it’s not only the time that it will take which you should consider - it can be a traumatic experience. Rather than dwelling on the past, an agreement between you and your employer can give you the chance to move on with your life to a new better job which suits you more.

A good reference

Frequently your reference can be confirmed as part of the compromise process, which can have real benefits as you can ensure you guarantee yourself a reference above your existing legal rights. This can really ease the journey into a new and better job.

Lower solicitor fees

It’s a legal requirement that you get independent advice before signing a compromise agreement so you should certainly get advice from an Employment Law solicitor, but often the company you work for may be willing to cover most of this expense. Even if they aren’t, these costs will almost certainly be lower than for a protracted Employment Tribunal battle.

New opportunities

It’s always good to have a positive outlook. If you do find yourself in the circumstances where you may have to sign a compromise agreement this can create a situation which will allow you to move on and take advantage of opportunities that otherwise may never have presented themselves to you.

Chris Norton writes for Armchair Advice. Armchair Advice is a UK website providing specialist job loss and detailed information on compromise agreements . Whether you require emotional support, financial advice or employment law solicitors , you can find them all at Armchair Advice.

For more information please visit Armchair Advice .


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