Compromise Agreement Essentials

A compromise agreement is a legally binding form by means of which a prejudiced party and a potentially at-fault part may resolve a dispute or issue for the benefit of both parties and in order to avoid going to court. In general, compromise agreements are used by employers and employees to settle on the satisfying terms of redundancy or on other existing claims at the workplace.

Compromise agreements are recently more and more adopted by corporations and companies in situations of redundancy and workplace discrimination. Basically, through such a particular contract the (ex/) employee is asked to give up his statutory right or any other rights stipulated in the employment contract in exchange of some sort of compensation. Classically this return consists in several wages (on average between two and four) or an ex gratia payment given upfront. A compromise agreement can be signed either during the employment period or after termination of contract. Officially, an employee can file a complaint against his former employer in three months time after the date of termination. This is the reason why several companies prefer to close a compromise agreement beforehand just in case their former employees might change their mind once sent home.

Nonetheless, there are two type of rights that a person can not waive by means of such settlements, which are his pension right and personal injury claims. This means that, even if one signs a compromise agreement he is still entitled to pursue in the tribunal his present or former employee for the annuity he is owed or any personal injury at the workplace that he was not aware of when accepting that agreement.

Nevertheless, there are two type of rights that an (ex/) employee can neither be asked to, nor give up, namely the personal injury claims and his pension rights. In other words, even if a person accepts to sign a compromise agreement his rights to sue his employer or former employer against any personal injury that he was not aware of up to that moment or against the pension rate he is entitled to, are overall not affected.

All in all, both the employer and the employee can benefit from a compensation agreement as long as each party is reasonable and sensible to their own interest. However, in cases of serious prejudice like workplace incidents that may lead to personal injury claims, going further on the legal scale might be a better alternative. Nevertheless, in any type of circumstances, the assistance of a specialised and skilled independent solicitor can indeed increase your winning odds, as well as the margins of the benefits you are entitled to.