Compromise Agreement
Getting the push at work?
Finding out that you will lose your job is never a pleasant experience, whether it is through redundancy or any other reason. Nowadays, employers often prefer to issue Compromise Agreements as a way of drawing the employment relationship to an end without there being any recourse from the employee.
Whereas redundancy generally occurs where a job ends on the grounds of a lack of available work for that member of staff, and the post is no longer required, termination of a contract can be for many other reasons. Where the company feels that there is no work for the employee, redundancy can take place, and by law, a statutory redundancy package would be offered to the employee based upon the number of years of service the employee.
Employers have the opportunity, however, to hide the true reasons behind a dismissal by issuing a Compromise Agreement in an attempt to cover the situation up. These Compromise Agreements are binding on both the employer and the employee by offering conditions for the employment relationship to end once the terms are accepted and a sum of money has been accepted by the employee as a termination payment.
If your employers intend to terminate your contract of employment and you have received a Compromise Agreement then it is possible to try and negotiate the terms of the agreement to suit you as an employee, particularly in relation to the amount of the termination payment and in the level of detail in your reference to assist you in your search for new employment. You may even find yourself unable to work in a certain geographical area, depending upon which industry you are employed in. The terms of your original contract of employment may continue.
Stringent wording is often found in Compromise Agreements seeking to prevent any future claim from being made in a Tribunal or Court for a grievance to do with dismissal, harassment, or any other aspect of the employment prior to termination. The name Compromise Agreement exists as it is literally that, a “compromise” that has been reached over the ending of the employment relationship between the employer and the employee, and both parties should ensure that the agreement is indeed a compromise and not one-sided.
Once signed by both parties, the Agreement is dated. From that point onwards both the employer and employee must adhere to the terms specified within the Agreement, failing which there is the risk of legal proceedings or revocation of the financial settlement, dependent upon which party infringed upon the terms of the Agreement. This is a unique situation where Compromise Agreements differ to redundancy packages.
In any event it is always a wise decision to get independent advice on any employment related query amounting to dismissal or termination from work to understand what rights and options are available to you so that you are in a better position to redress any grievance as quickly and effectively as possible.
Elizabeth Guppy offers free 15 minute consultations on all employment related queries.
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