Compromise Agreement
It is easy for an employer to fall foul of the plethora of employment legislation and procedural hoops before legally dismissing an employee, and typically this takes months and still does not guarantee that an employee will not start employment tribunal proceedings. Consequently, for commercial reasons it has become common, in some circumstances, for the employer to seek to resolve the situation more quickly than those procedures would otherwise permit by using a compromise agreement.
The compromise agreement usually provides the employee with a settlement amount in return for which he or she must forgo the option of taking the employer to an Employment Tribunal or Court.
This achieves a successful result for both the employee and the employer and provides the employer with the reassurance that the employee is barred from bringing an unfair dismissal claim, or another type of claim, after they have left the employment.
Benefits of Compromise Agreements
• Avoids costs and risks of tribunal proceedings
• Sets out terms agreeable to both employer and employee
• Employee has the certainly of a settlement sum
• Employer is protected against employment claims.