legal advice for compromise agreements

<p>Compromise agreements have recently been on the rise, as the awareness increases of their potential benefits. Employers have for many years now increasingly used compromise agreements as a mechanism for preventing possible future complaints to a tribunal and as a means of terminating employees employment.</p> <p>Such agreements have become a useful tool in situations where the relationship between both the parties breaks down irretrievably, allowing the parties to agree the terms and conditions among themselves upon which the employees employment comes to an end. This gives great scope and flexibility to employees in agreeing a number of terms and conditions, although there are some firm requirements that must be followed in relation to content and format to ensure the agreement validly binds the parties. With the knowledge of these terms and conditions, both parties can agree to a clean break.</p> <p>There are many other circumstances where compromise agreements have been widely utilised and proved successful, a survey found circumstances such as redundancy situations (25.75%), terminating an employees employment for poor performance or misconduct (38.95%) or removing senior staff in order to avoid high value disputes (24.3%).</p> <p>Most employers favour such agreements, as they are a result of preventing the risk of tribunal proceedings arising out of a termination of an employee’s employment in the future.</p> <p>These agreements are also often attractive to employees who frequently receive an enhanced compensatory payment in return for signing the agreement, which is paid on a specific date or within a specific time frame. The added attraction for employees is that the first £30,000 of such a payment is tax free.</p> <p>If you would like further information on compromise agreements or any other agreements please phone (0116) 2999199 for a free consultation.</p>