Sometimes it is in the interests of the employer and the employee to look for certainty when an employee’s employment comes to an end. The employer will want to ensure that there is a clean break and there is no prospect of facing a claim in the Employment Tribunal at a later date. The employee may be looking for an enhanced termination settlement and a reference for future employees. A good way to achieve this is to use a compromise agreement. At A H Brooks & Co we are able to ensure that whether you are an employer or an employee that the matter is handled correctly.

At A H Brooks & Co we realise that great care must be taken in the drafting of a compromise agreement if it is to be effective.

Essentially is must satisfy these requirements:

• It must be in writing
• It must be drafted to refer to a specific complaint or complaints that an employee may have against the employer
• The employee must have independent legal advice about the nature and effect of the agreement
• The advisor providing that independent advice must be specifically named in the agreement
• That advisor must have must carry professional indemnity insurance

If any one of these elements are missing then the agreement will be invalid and the employer could still face the prospect of the employee making a claim for unfair dismissal, discrimination or other employment related issue in the Employment tribunal.

So the Employer, who invariably has the Compromise Agreement drawn up for them, must take care in identifying any potential claims the employee may have preferably discussing these with the employee before drawing the agreement up. It is not sufficient to include a blanket clause seeking to avoid all claims that could be made. The requirements are clear that the agreement must relate to specific claims.

An employee also needs to take care as employers often frame their compromise agreements to limit the employee’s rights. For example they may include a clause requiring the employee to pay the settlement figure back in certain circumstances, or they may try and restrict the employee from seeking work in a similar industry, or within a certain area in which they may be operating and so on. All of these things need careful consideration and advice.

Compromise agreements can be a useful tool for the benefit of the employer and employee, but they can also be harmful if they do not fairly strike a balance between the employer and the employee.

From an employer’s view it is far more cost effective to ensure that you handle such situations correctly. The cost of seeking the correct advice on how to handle redundancy is money well spent. Ensuring that the documentation and procedure has correctly been carried out will avoid any unnecessary stress and cost of litigation should mistakes have been made.

If you are an employer having to consider redundancies within your workforce then at A H Brooks & Co we can advise and assist in the correct procedure.

If, as an employee, you are being asked to consider redundancy we can provide advice and assistance to ensure that you are being treated fairly. If you have signed a compromise agreement without independent advice or feel you have been mistreated we can also provide advice and assistance as to your options

Whatever you needs at A H Brooks & Co we can offer a friendly, informative and straight forward package of advice.

Please contact Peter Haycock at our Leek office on 01538 383201 or email [email protected]