You haven’t slept well; you have a stiff neck and your stomach feels tense. The diagnosis: one of your employees is leaving the job, everything has turned sour and you are worried that they might take you to an Employment Tribunal. Well, here’s the good news: entering into a compromise agreement could settle things amicably for both of you.
A compromise agreement is an agreement made without the involvement of ACAS or an employment tribunal. Indeed, it is often done to prevent a case reaching the tribunal stage. But it has to meet all the legal requirements for it to be legally valid. Here you have a good starter guide to give yourself an idea:
- the agreement has to be in writing. The form of words that must be used when drafting the agreemnent is very specific – using a skilled adviser will reassure you that everything is correct
- it’s important that the agreement deals with all the issues that have been complained about. Be careful, using a catch-all phrase is not acceptable, make sure everything the employee is complaining about – or might complain about – is covered
- an employee signing a compromise agreement is allowed to seek independent professional advice from a solicitor. As the employer, usually you will have to pay for this. Why? Well, failure to do so could be interpreted as trying to prevent an employee from seeking independent advice. However, this doesn’t usually cost more than £500
- check with your adviser that they have adequate professional indemnity insurance and make sure they are named in the agreement, and that they sign it
- take care to list the exact sections of law that the compromise agreement refers to. This could include, for example, ‘a claim under Parts X or XI of the Employment Rights Act 1996’. Here also is where having the help of an experienced compromise agreement solicitors will make things easier for you.
Can you feel yourself relaxing and the tension starting to lift? No one really wants a complicated and stressful tribunal – whether the employer or the employee – so the chances of settling things amicably with a compromise agreement are high.
Now you can enjoy the rest of the day and sleep well tonight!