This article aims to respond to some from the most commonly asked queries about compromise agreements in the UK. The laws surrounding compromise agreements far away vary so be sure to take advice strongly related to where you live.

When are compromise agreements used?

A compromise agreement is frequently put forward by a manager that is going to breach an employee’s rights by terminating their employment contract. It is normally offered if your employer realises that they will lose an Employment Tribunal. This means that they can be frequently used in the event of discrimination, unfair dismissal, constructive dismissal and redundancy.

Compromise agreements have grown to be more and more common in redundancy cases as employers have increasing legal responsibilities when confronted with redundancies. This means that it’s easy for a business to breach an employee’s rights by looking into making them redundant. A compromise agreement is consequently utilised by the employer to pay the employee just for this breach as well as prevent them from generating a claim against them for the Employment Tribunal.

Does a compromise agreement prevent me from taking any a lawsuit against my employer?

No. It will only sign up for the subject of the first breach. The law is quite clear that it must be illegal with an employee to ‘contract out’ of his/her employment rights. Therefore if a different claim against your employer arose you’ll still be able to take it with an Employment Tribunal, irrelevant on the agreement.

Generally claims which can be made after a partnership is signed are the following:

A breach of contract claim (about the terms on the agreement)
Personal injury claim (which is not excluded from the agreement)
Claims in terms of accrued pension monies

If a company only really signs a compromise agreement after they know some may lose in an Employment Tribunal, how is it that I not take those to a Tribunal?

Firstly, a manager might want to keep the matter private instead of fighting true before an Employment Tribunal. Therefore it is not always the truth that the employer recognizes that they ‘might lose’.

Secondly, compromise agreements are significantly less expensive than taking a claim before a Tribunal. The following savings can be achieved if such a partnership is signed:

Tribunal fees
Extensive hips

Cost savings can also be made for the staff member because it is usual practice with the employer to spend both sides’ legal fees on an agreement. When getting a claim for an Employment Tribunal, however, each party normally have to repay their own legal costs on the conclusion, according to the outcome from the case.