Compromise Agreements

At Darlingtons, we deal with compromise agreements literally on a weekly basis, so can genuinely claim to be experts in this area in addition to employment law generally.

We provide fast, efficient independent to employees, which in the vast majority of cases  is free to you as employee, as the employer pays our fees for advising you on the compromise agreement.

Compromise agreements are offered for a variety of different reasons. Sometimes, employees simply want basic advice and to sign off on the agreement, others want to know about the prospects of negotiating a more favourable financial package. whiochever is the case, we are able to guid and assist, whether the underlying situation is redundancy or possible constructive unfair dismissal.

Compromise agreements are generally standardised documents in terms of the clauses incorporated. This is because such agreements are created by statute and must include a number of clauses whereby if you decide to sign, you will contract out (waive) your potential rights to make claims for the majority of matters arising out of the employment relationship.

How much should the ex gratia payment be ?

One aspect employee clients regularly ask about is the amount of money offered. Is it standard or uniform ? The answer is no but there is something of a "going rate" which is between the equivalent of 1-3 months salary gross, paid ex gratia, in addition to contractual entitlements. There are technical and practical reasosn why employers are unlikely to offer more than this in most cases, regardless of the underlying issues.

This is because employers tend to look at the likely costs of starting to defend employment tribunal proceedings in circumstances where legal costs they incur are unlikley to be recvovered from the employee, whether the employee wins at tribunal or not. Employers often take the view that if they offer a few months salary this is better than incurring some legal costs. However, they will also often believe that there is no incentive to offer more than this as they can always renew the compromise agreement offer once proceedings are underway. They will also know that for many tribunal claims, the employee needs to show a loss and vigorous attempts to get work. If the employee gets another job quickly, there will be no loss, and the employee would have been better off accepting the compromise agreement. This explains why there is something of a "going rate".

We will also advise you on the tax implications of the agreement, and whether you are based in London or throughout the UK, you can be assured of a very rapid service and effective negotiation from our employment lawyers and solicitors.

Why have I been offered a Compromise Agreement ?

A compromise agreement may be offered by your employer for a variety of reasons. There may be an underlying dispute, a breakdown in trust and confidence, you may have raised a grievance, be medically unfit to continue working or may not want to return to work at the end of maternity leave.

Please contact us now by either telephoning on 020 8951 6666 or by clicking on this compromise agreement instruction link.