You may have heard the term compromise agreement or severance agreement bandied around but you may not be sure exactly what it means. When an employer wants to part company with an employee, whether as a result of a dispute or on amicable terms, a compromise agreement allows the employment to end on agreed terms.
A compromise agreement is a formal written agreement in which the employer gives the employee a severance payment and in exchange the employee agrees to give up all of their legal rights against the employer, except for a claim for breach of the compromise agreement, and certain claims for personal injury and claims in relation to accrued pension rights are excluded from the severance agreement.
In this brave new world our lives are more interesting, busy and complex but also more stressful. One of the key stress points in modern life is our work and our careers especially if one of the following scenarios occurs:
- An employee is being made redundant
- There is, or could be, a dispute between the employer and the employee, whether in the form of an internal grievance or a Court or Tribunal case
- There are difficulties at work, or things are just ‘not working out'
In any of these scenarios the employer may decide the best solution is to offer the employee a compromise agreement with a suitable severance package.
If you are an employee facing one of the scenarios outlined above but have not been offered a compromise agreement, then why not call us? We may be able to move the situation forward and negotiate a suitable compromise agreement for you.