Compromise Agreements - Case Studies from Guy Thompson & Co solicitors based in the City of London; resolving employment disputes for employers and employees

Disability

Although the  majority of Compromise Agreements concern redundancy or other dismissal, this isn't always the case. One of the first compromise agreements we negotiated was for Kienan (name changed) who suffered from a disability, namely severe claustrophobia.

Disability doesn't have to mean physical handicap, and Kieran was unable to cope with staying any length of time in a confined space, including trains, especially the underground. Being unable to travel where he wanted definitely affected how and where Kieran could work.

He was fine working for a company with offices within walking distance of his home. His troubles began when his employer was bought by a business in the City. The new owners valued his contribution to the business and wanted him to come and work at its City office. Kienan could have refused to relocate, because his employment contract only required him to accept moving to a new workplace within 20 miles, and his new office was over 25 miles away.

But the pay was good, and he liked his job, so he agreed with the new owners that he would give it a go.

Disaster! The underground made him ill and, after attempting to make the journey overground via British Rail he collapsed amongst the commuters at Liverpool Street station.

His new employer saw this couldn't go on and accepted Kienan would have to leave. He was treated with understanding and we were able to negotiate a generous settlement even including compensation for a missed bonus payment for a project Kienan would never be able to complete and for the cost of the season ticket he would never be able to use.

After several drafts we were able to cover all the angles and Kienan was delighted with the outcome, which tidied up the tangled problems of an employment transfer and a possible discrimination claim (his claustrophobia could havebeen classed as discrimination).

Kienan's new employer wanted to help, but had the sense to insist that any agreement with an employee that was out of the ordinary was recorded in a Compromise Agreement. As so often, Compromise Agreements delivered a win - win for both parties.

When  it's Time to Move On

We are not talking about voluntary redundancy. Volunteering at a time of compulsory redundancies is a rather blunt tool that often means the most valuable staff members leaving (and being paid to go).

Instead, what we have often seen are employees who have built up valuable employment rights finding they are trapped in jobs that no longer satisfy them. In the right situation, with a supportive line manager, it is possible to agree a voluntary redundancy that meets the needs of both employer and employee.

Why would the employer pay his staff member to leave if he could simply dismiss the employee as redundancy?

Frequently what happens is the employee himself sees that there are better ways for his job to be done than by keeping him in place. He sees his position could be made redundant before his employer does - no wonder he isn't happy in a job he thinks is pointless. But unless he has a new job lined up he may not want to hand in his notice and risk a period of unemployment.

This is where the compromise agreement comes in to provide for voluntary redundancy along with a structure hand over of responsibilities from the leaver to whoever will take on whatever parts of his role still need to be done.

We have been pleased to be involved in this process at some major accountancy and law firms.

Why was I chosen?

One of the most sensitive aspects of a redundancy process is the selection of the correct people to be made redundant. Professional advisers at City institutions will brief their clients on the need for notice, meetings, consultations, and agreed selection criteria. But objectivity is hard to prove. We have seen clients complain to us they have been discriminated against because of their age or colour, or maybe they were chosen because they were the cheapest person to get rid of.