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Compromise Agreements

It is important to be aware that compromise agreements are presently being handed out like confetti to employee’s who are leaving and they may well not be valid. Especially if the Employee receiving the compromise agreement has not had the right-independent legal advice. Compromise agreements are now simply a part of working life for Employers in the UK. In times of mass redundancies, because when a employee signs one, it means that the employment termination payment has been legally accepted and it is important to know that this is deemed as a final settlement and the employer cannot be sued or taken to court at a later date. So in some ways a compromise agreement is there to protect the Employer.

However, one of the most important legal requirements if a compromise agreement is to be valid is that the Employee gets the right, impartial legal advice from an independent compromise agreement lawyer.

As any good lawyer will know, section 203 of The UK Employment Rights Act 1996 is very specific. The compromise agreement must actually identify the employee’s independent adviser or the agreement may not be valid.

It says that the Employee must have received the right legal advice from a relevant legal company or person in relation to the effect of the compromise agreement.