Compromise Agreements are now an essential feature of employment law in the United Kingdom, whether following a dismissal, agreed resignation, redundancy or even a discrimination or harassment claim.
They were first introduced in 1993, and they are the quickest and cheapest way of making sure agreements between employers and employees are final and binding.
The reason Compromise Agreements are needed from an employer's point of view is that English law stops an employer using economic muscle to force through an agreement, but instead allows employees the right to cancel most settlement agreements that would affect their statutory rights. Having spent decades building up a framework of employment rights and obligations, the government did not want these rights to be given up without good reason.
Under these agreements employees exchange the right to make further claims against their employer in return for a binding agreement ratified by an independent adviser who will check all the essential ingredients are in place.
Are Compromise Agreements Worth While for Employees?
Because of the benefits to both parties the answer is "yes" - these agreements are a great idea. The alternative way to get a final and binding agreement would be to ask the courts, tribunals or ACAS to rubber stamp agreed deals, when they should be concentrating on disputes the parties could not resolve for themselves.
There is real satisfaction in negotiating agreements that create a win-win for both parties. Anyone who thinks they are a boring chore has never seen the pleasure and relief of an employee after a painful redundancy or dispute is finally concluded.
The legal principles of compromise agreements haven't really changed since they were introduced in the early 90s, although some vital decisions of the courts mean there are now several traps for the unwary. Even so, if they are correctly drawn up they almost always work, and are almost never challenged or broken. There are now 34 types of employment issue that can be settled by a Compromise Agreement. What other employment law can claim such success?
For further information or help with drafting or concluding a compromise agreement, call us now on 020 7274 0110, or write to contact@citycompromiseagreements.com.