Compromise Agreement
Drafting compromise agreements for employers
Leicester Compromise Agreement Solicitors
Are you thinking of using a compromise agreement?
Compromise agreements are mutually beneficial for employers and employees. They allow businesses to amicably settle disputes outside of court and employment tribunals and create a clean break in the employer/employee relationship.
If you are thinking of using a compromise agreement, you should bear several factors in mind:
ñ Why you are using the agreement
ñ The strength of the employee’s claim
ñ The kind of package you should use given the circumstances
ñ Your obligations to the employee
Why you are using the agreement
Compromise agreements can generally be used where you need to dismiss employees due to:
- Redundancies
- Employees not wanting to return to work after maternity
- Employees who cannot return to work because of ill health
- Employees who leave because of grievances in the workplace
You should always bear in mind that compromise agreements should be used where the employee has a strong hypothetical legal claim against you. Please get in touch with Leicester compromise agreement solicitors to find out where your business stands.
The strength of the employee’s claim
You need to predict how strong your employee’s potential legal claim is. If it has no chance of succeeding, obviously there is little point in offering an agreement subject to your duties under the law being fulfilled (following proper dismissal procedures, for example). By getting in contact with us, you can find out for sure how strong your employee’s claim is.
The kind of package you should use given the circumstances
Compromise agreements are supposed to create finality and certainty, and quickly and efficiently create a clean-break between you and the employee. However, compromise agreements are negotiable, such that the process can get bogged down by employees requesting more on their adviser’s advice. To make sure the process is quick and efficient, we will advise you on:
- The upper and lower limits generally offered in circumstances like yours
- Taxes
- Pensions
- Other benefits that might be offered to the employee
- Clauses to protect you from poaching of clients and colleagues
We can advise you on the kind of package you should offer and where disputes do occur, we are also happy to negotiate on your behalf.
Your obligations to the employee
Whilst the law has encouraged the use of compromise agreements, it also requires employees to fulfil certain duties towards its employees when offering them. We will fully advise you on your responsibilities and make sure you are compliant.