A compromise agreement is a legally binding document under which an employee agrees not to make a claim against their employer. This agreement is usually in exchange for a sum of money.
A compromise agreement draws a line under any existing or pending employment law issues between the organisation and the employee, allowing you to part company without the worry of future legal action against you.
The compromise agreement must be in writing and relate to a particular complaint. The employee must have taken legal advice before signing it and it is normal practice for employers to pay for the employee to see a solicitor.
When deciding how much to pay the employee under the terms of the agreement, you should bear in various factors including their length of service, their salary, and the circumstances in which their employment is being terminated.
Contact us for further information on compromise agreements.