Frequently Asked Questions About Compromise Agreements
The aim of this page is to give you a general overview on frequently asked questions regarding compromise agreements. However if you have been given a compromise agreement you will need specific advice on it. Please contact us for a free initial consultation on your compromise agreement. One of our solicitors will be happy to assist.
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What is a compromise agreement?
Put simply it is an agreement between an employer and employee in which the employer offers the employee money to sign away his or her rights to sue the employer in the future.
When should I take advice?
As soon as possible. Contact us for a free initial consultation as soon as you know there is an issue with your employment. If in doubt contact us.
What happens if I sign?
There will be a clean break between you and your employer. You will not be able to bring a claim against them in the future. However you will usually be offered a compensation payment for signing.
Why do I need legal advice? Why can’t I just sign it and take my money?
If you do not take advice it will not be legally binding. By law you must take advice from a ‘relevant independent advisor’ such as a solicitor. All of our solicitors are ‘relevant independent advisors’ for the purposes of your compromise agreement.
What is our role?
Our role, as solicitors, is to explain the meaning of the words within the compromise agreement and what rights you are signing away.
Will I be charged anything for the legal advice?
You will not usually be charged a penny. Your employer will offer a sum for legal expenses. This should cover your fee. However a small minority of compromise agreements are not straightforward. Occasionally, in more complex matters, for example when we need to research a point of law or conduct time consuming prolonged negotiations or if the compromise agreement is worth a substantial sum of money there may be an extra charge. We will inform you of this and give you a quote before we carry out any extra work.
What if my compromise agreement is complicated and I have to pay extra?
We will give you a quote before we start any work.
What if I don’t agree with some of the content of the compromise agreement?
We can negotiate on your behalf. This can mean removing terms you feel are unfair or attempting to negotiate a higher settlement.
Is there any chance of getting more money for me?
Employers are sometimes prepared to negotiate, especially if you have valid reasons for wanting an increased settlement or if you have what seems to be a valid claim against them. However in mass redundancy situations there is usually a budget that the employer is working within and it is difficult to get any sort of increase.
Will re-negotiating cost me more?
Not necessarily. We may still do it under the legal expenses your employer is offering. However if the matter is complicated or particularly time consuming then there may be an extra charge. You will be informed of this beforehand.
When will I be paid my settlement?
The payment date will be contained within the compromise agreement. It is usually a set time after you sign the compromise agreement or leave the employment (i.e. 14 or 28 days or the next company pay run).
Can I tell anyone about what is inside the compromise agreement?
Usually not. It is standard for a confidentiality clause to be contained within the compromise agreement. Usually this only covers the terms of the compromise agreement and not the fact that you have reached an agreement. However on occasions the clause specifies that you may not even mention that you have signed a compromise agreement.
Why are compromise agreements being used in redundancy situations?
Compromise agreements are being increasingly used by employers in redundancy situations as a mechanism for preventing any future claims arising out of the redundancy. For employers compromise agreements are a useful tool, especially if they have not fully or fairly complied with redundancy procedures. However they can still be used even where the redundancy is fair to give the employer a clean break between you and them. Remember by signing the compromise agreement the employee agrees that there is a ‘full and final’ settlement of all claims against the employer.
Will I need to visit your office in the City of London?
No, we can liaise by telephone, fax, email or post. We often prepare the groundwork by email and telephone and then give the advice on the compromise agreement via a pre-arranged telephone conference.
What if I prefer to meet my solicitor for a face to face conference?
We will be happy to have a face to face conference at our offices in central London. There is no extra charge for this. You will need a pre-arranged appointment. Please see our contact details for our office location.
What if I don’t want to sign the compromise agreement?
You are not obliged to sign the compromise agreement. You may feel you have a claim against your employer. We can offer a specialist employment law service. We can represent you in an Employment Tribunal. However separate funding will have to be in place for any advice relating to any prospective claim against your employer.
What do I do now?
Contact us and send in your compromise agreement. We can offer you independent legal advice on your compromise agreement from a qualified solicitor, 14 hours a day, seven days a week.
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