Can I propose a compromise agreement to my employer?

Direct 2 Lawyers
January 9, 2013

If you’ve recently experienced problems at work and believe that it won’t be possible to continue your employment with your current employer then you may want to resign from your job or negotiate a mutual termination of your contract. In the majority of such circumstances employees are will want to safeguard any payments that they’re owed by their employer and may want to see if they can obtain some form of ex-gratia payment (or some other form of benefit) in return for agreeing not to pursue their employment law rights before an Employment Tribunal or through the civil courts. We’ll therefore look in this post at the following issues:

Why might you want to propose a compromise agreement to your employer?
What are the benefits of proposing a compromise agreement?
What are the disbenefits of proposing a compromise agreement?
Should you propose a compromise agreement?

Why might you want to propose a compromise agreement to your employer?

As addressed above, there are certain reasons why you may want to consider suggesting a compromise agreement to your employer. These can include (among others):

If you have been bullied, harassed or discriminated against at work and want to leave your employment
If you have a personal conflict with another member(s) of staff and want to leave your employment
If you have recently been disciplined or threatened with a disciplinary because of misconduct or performance issues
If you believe that you may be made redundant; or
If you want to take a voluntary redundancy option that’s being offered

What are the benefits of proposing a compromise agreement?

The principal benefit of proposing a compromise agreement is that you may not be offered it by your employer – it’s better to take the first step in these circumstances. The benefits of entering into a compromise agreement can include (among others): the payment of a financial monetary sum (cash), the payment of a financial non-monetary benefit (such as, for example, extended health benefits), the provision of a reference and/or an agreement as to confidentiality as to the reasons for leaving.

What are the disbenefits of proposing a compromise agreement?

The principal disbenefit of entering into a compromise agreement is that you’re waiving your statutory and contractual rights (among others) to make a claim against your employer. Before you sign a compromise agreement your employer is obligated to inform you that you must take independent legal advice from a relevant legal adviser (such as a compromise agreement solicitor). If you fail to take suitably experienced advice or take advice from an adviser who is not suitably independent then you may be undercompensated for the agreement.

Should you propose a compromise agreement?

Whether you should propose a compromise agreement to your employer and when is a delicate matter of timing and fact. However, you will not know whether your employer is willing to enter into such an agreement unless you either take the first step or your employer proposes it to you.

Direct 2 Lawyers offer free employment law advice for employees and free employment law advice for employers.