Compromise agreements have had a name change! However, other
than a new title, very little else is changing for these agreements
which are regularly used by employers to avoid claims by employees.
So what are Settlement/Compromise Agreements? They are
written agreements, whereby an employee or worker agrees
to waive their right to bring or pursue certain employment tribunal
claims against a company, usually their current or former employer.
It is usually presented to an employee prior to ending employment
to provide security that the employee will not bring a claim before
an employment tribunal. The company usually pay a
compensatory sum to the employee in recognition for signing the
agreement.
There are certain legal requirements for a Settlement agreement
to be binding; firstly it must be in writing, it must refer to a
particular complaint rather than simply waiving all employment
rights, an employee must have received legal advice from a
relevant independent adviser (usually a solicitor) to advise on the
effect on the employee's legal rights and the company usually
contribute towards the cost of this legal advice.
Settlement Agreements will now be used following a
pre-termination conversation, which allows employers to engage in
confidential, 'off the record' conversations with employees about
ending employment.
Read our latest full
blog on the new regulations for more details.
It is vital to get this right at the outset. Please call
or email me if you'd like more information - Nicole.Humphreys@acumenbusinesslaw.co.uk
or 01273 447069 (Direct line).