Compromise Agreements

Definition of Compromise Agreements

A Compromise Agreement is a formal legal agreement entered between an employer and an employee whereby the employer agrees to pay the employee a sum of money and in return the employee gives up most if not all of his/her employment rights.

When are Compromise Agreements used?

Compromise Agreements can be useful for settling disputes quickly between employer and employee. For instance if the employee has a claim of unfair dismissal the claim can be settled using a Compromise Agreement – saving the time and cost of going to the Employment Tribunal.

Getting the Compromise Agreement signed

To be valid the Compromise Agreement has to be checked by the employee’s own lawyer before it is signed. The lawyer’s fees are paid by the employer. It’s important for an employee to get proper advice on the terms of a Compromise Agreement as they normally contain a lot of small print which may need changing. We regularly advise employees on Compromise Agreements and can turn them round quickly.