More employers are seeking to use Compromise Agreements, particularly where making redundancies and the Law Society have warned that Compromise Agreements may not offer employees the best deal.
Compromise Agreements are used by employers to agree financial settlements for notice pay, redundancy pay and any other outstanding contractual pay, and often include terms to prevent employees bringing a subsequent Employment Tribunal claim.
Employees are entitled to seek independent legal advice before signing any Compromise Agreement and employers will contribute towards legal expenses. Although the legal advice need not necessarily be given by a lawyer or solicitor, the Law Society maintains that solicitors are best placed to give advice about Compromise Agreements and, if necessary, negotiate a better deal for employees.
Compromise Agreements can also include clauses using restrictive covenants that could prevent an employee setting up as a competitor to their former employer or poaching other employees or customers from their former employer. These clauses are included to protect the former employer’s business, but can also unfairly restrict former employees from taking up a job offer from a competing employer or effectively prevent them setting up their own business. These clauses are best looked at by a solicitor who will be able to advise whether they are fair or not and can negotiate accordingly.
If you have been asked to draw up or sign a Compromise Agreement, please phone Ashley Hunt or Carrie-Ann Randall now on 0116 212 1000 or complete one of the on-line forms.
