Why Use a Compromise Agreement?

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by: Tom Tilinhouse
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Word Count: 470
Date: Thu, 23 Dec 2010 Time: 5:19 AM

So, the worst has happened. Andrew in Accounts might have been harassing his secretary and Sue in Sales might be a kleptomaniac, but it's hardworking, responsible old you that's for the chop.

Increasingly, when our esteemed bosses want to boot us out of the door, they will use a nifty little tool-of-the-trade known as a Compromise Agreement. Sadly, in these difficult times, it is a tool that is likely to become increasingly familiar to many.

So this is how it works:

Your bosses want to make sure that you are firmly off the premises and you will not come back to threaten them with court or tribunal. You want to make sure that you have been appropriately compensated for being unceremoniously thrown on the street. This is where our friend, the Compromise Agreement steps in to save the day.

The Compromise Agreement ties up all the loose ends when a contract of employment is brought to an end. Typically, it protects an employer from litigious erstwhile employees and sets out how much the company will pay said employees to toe the line.

It does other things too. It is a clear and legally binding record of all the terms and conditions of the termination of employment. It will cover any money that might be owed to you for unused holiday, for example (or any money that you might owe them).

Signing a Compromise Agreement will usually mean that you are not allowed to take legal action against your ex-employer in the future and will often include a few other conditions you have to abide by. It is quite usual, for example, for an employer to bar you from slagging them off to the press, from pinching their clients or from telling their secrets to their competitors. All of this seems fairly reasonable (I suppose).

It's not all one-way traffic, though. A Compromise Agreement will usually stop petty ex-bosses from badmouthing you. It is perfectly standard for the agreement to include a clause that covers what the old bosses will say about you to prospective bosses. They will usually state exactly what they will say in response to any reference requests. Of course, this has to be true (you can't get them to say you are an excellent spy or brain surgeon - unless you are), but it also has to be mutually agreed.

A compromise agreement has to be checked out by a solicitor, acting on your behalf. A great thing about this is that your company will normally pay for this.

So look on the bright side. You get peace of mind, a bit of money to tide you over and you never have to speak to Andrew from Accounts again.

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If you require the advice of a compromise agreement solicitor, contact swift compromise agreements.

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