Redundancy Rights - compromise agreements

Can compromise agreements be used for redundancy?

If you become in dispute with your employer and threaten to take them to an employment tribunal, they may offer you a compromise agreement. As its name suggests, a compromise agreement is a legally binding agreement that you won’t take your grievance to an employment tribunal if your employer pays you a sum of money. This is not compensation, as you would normally define this, but a goodwill payment to amicably settle your dispute. In most circumstances, your compromise agreement would not include any admission of guilt or liability on behalf of your employer.

Redundancy Rights

Compromise agreements are fairly common for redundancies. When you are made redundant you have certain redundancy rights, including the right to redundancy pay. The law sets out your entitlement to redundancy pay and the minimum amount payable. A compromise agreement may also cover other aspects of your redundancy rights.

As your compromise agreement is legal document it is vitally important that you have an employment law solicitor assess the contents of any agreement you are offered. In fact it is a legal requirement under the Employment Rights Act 1996 that you receive advice about the compromise agreement your employer is offering you. You need to ensure that all of your redundancy rights are covered under the agreement, and that you are not being offered less than your lawful entitlement.

Employment law redundancy rights in UK. Employee and Voluntary

The law also states that a compromise agreement must be written in a particular way and can only relate to the dispute it seeks to resolve. Your employer can’t use a compromise agreement to settle any other problems or disputes you may be involved within.

Employment tribunals can be complex, time-consuming and also damaging to a company’s reputation especially if the tribunal is hearing alleged incidents of gross misconduct. Employers are therefore increasingly using compromise agreements to avoid employment tribunals. If you are offered a compromise agreement that you subsequently sign, you would then give up your right to take your employer to an employment tribunal about the dispute you are involved in. Your agreement would also place restrictions on what you could say about your dispute and also potentially prevent any future civil action. This is why you must take legal advice from a qualified employment law solicitor before you sign your agreement, to make sure you are receiving your full redundancy rights

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