What is a compromise agreement?

A compromise agreement is a contract regulated by statute which allows for potential (or existing) legal proceedings in the Employment Tribunal or the High Court to be settled. The employee is normally offered some sort of financial (i.e. a payment of money) or non-financial (i.e. the provision of a reference) benefit as consideration for waiving their right to pursue their common law, statutory or equitable employment law claims against their employer. In order for a compromise agreement to be valid it has to satisfy a number of conditions: among others, it must be in writing, it must relate to particular proceedings, and the employee must receive independent legal advice from a relevant legal adviser (such as an employment solicitor).

How can I get a compromise agreement?

There are generally two ways to get a compromise agreement – and these may seem relatively obvious. You can either:

Ask for a compromise agreement; or

Be offered a compromise agreement

Being offered a compromise agreement is the relatively more simple way to negotiate an exit from your employer as the offer from your employer is already on the table once you’ve received the agreement. Asking for a compromise agreement is possibly slightly more tricky than being offered one: a) you need to know to ask for a compromise agreement (many employees understandably don’t know a lot about them) and b) you may be asked what your demands are relating to the compromise agreement – for example, how much money you require to settle your claims, whether you want a reference etc.

The important thing – whether you’re asking for or being offered a compromise agreement – is to hedge your bets and not to agree to anything until you’ve received legal advice on the agreement. Your employer has an obligation to inform you that you should obtain independent legal advice – if they do not do so then the agreement may be invalid. Your employer will often offer a contribution to your legal fees incurred in advising on the agreement (normally between £250 and £500 – sometimes more). Your solicitor will normally be able to help you to negotiate your compromise agreement and should always advise you on the terms of the agreement.

Do I need a solicitor for my compromise agreement?

As you may have guessed from the above, you will require independent legal advice from a relevant legal adviser (not necessarily a solicitor – it can be a barrister or a suitably qualified CAB adviser) for your compromise agreement to be valid. However, when you choose to involve the legal adviser is up to you – you may wish to ask your solicitor to simply advise you on the agreement or, alternatively, negotiate it on your behalf.

London Compromise Agreement Solicitors are compromise agreement solicitors based in London