Compromise Agreements

If you are being let go from your work, for whatever reason, then it is very beneficial to reach an agreed redundancy package with your employer. Indeed most employers will insist on it, and commonly your employer will require you to enter into a Severance Agreement, often known as a “Compromise Agreement”. The Compromise Agreement will set out the terms of your leaving that both parties have agreed upon and will need to be signed off by a Solicitor or Legal Executive.

Normally a Compromise Agreement will include such things as:

• payment for your leaving (including a gratuity)
• date of departure
• what to do with company property
• the waiver on your part of any future claim against your employer
• miscellaneous clauses

all of which need to be considered with regard your position within the company, your reason for leaving, and any possible claim you might have against your employer for unfair dismissal, and what payments might result from that.

Ordinarily your employer will contribute to the legal costs necessary for the Solicitor to sign the Agreement. If they do not then we will inform you.

A lot of Compromise Agreements can be signed off on the day you come into the office, while others are worth spending the time and effort negotiating with your employer for a better deal. Hewetts have particular expertise in this field and will be able to let you know whether the Agreement reached is reasonable, or worth negotiating over. We are happy to assist you in the process of reaching the best financial settlement with your employer.

Negotiations

If necessary we will undertake negotiations on your behalf. We may be able to reach a better agreement with your employers than you have, should you wish us to do so. This might include:

• Increased severance payment.
• Payment in a more tax efficient manner.
• Release of restrictive covenants affecting where you work.
• A better reference than your employer might initially be prepared to give.

We have considerable experience in negotiating with employers and normally we are able to bring about a better settlement than you will have been offered.

Frequently Asked Questions

1.  Do I have to come and see you?

As with any legal matter we would prefer to see you if at all possible. It is amazing what comes out during interview that does not necessarily come out over a telephone conversation. Nevertheless, if it is inconvenient for you to visit us we are able to provide service without seeing you.

2.  Why do I have to see a solicitor at all?

The law states that Compromise Agreements can only be put in force once signed off by a Solicitor or Legal Executive. This is because part of the Agreement will involve you waiving certain legal rights to bring a court action against your employers. You must therefore be informed what you are giving up, and whether it is worth you giving it up. In other words, is the amount of money being offered you by your employer enough for you to reasonably consider waiving your rights to bring an action against them? Only a Solicitor or Legal Executive can tell you.

3.  What about my ability to work elsewhere after I leave? Maybe for a competitor?

A Compromise Agreement will deal with these issues, and often times they are issues that are worthy of being negotiated. Although certain restrictions may appear in your employment contract, under a variety of circumstances these can no longer have effect once you leave your employment. Therefore if the employer wishes to re-insert them into your Compromise Agreement, they are worth receiving a larger gratuity for.