Been offered a Settlement Agreement or Compromise Agreement?
When negotiating a settlement agreement (known as a compromise agreement in Northern Ireland), you might prefer to find a solicitor that’s near you. That way, you can go in for face-to-face meetings to discuss anything that’s concerning you. You know where they are based so you can check out their office and knock on their door if need be. You can be confident they operate in your area. Maybe they are aware of your employer and what they’re like. They might even have worked on behalf of your colleagues before. All this can help you feel more comfortable in what can be a difficult situation.
When you want a local solicitor, you’ll find us in Belfast, Leeds, London and Newcastle – all towns that are easy to get to. We help with Employment Tribunal issues anywhere in Britain and Northern Ireland as well as court matters in England and Wales.
If you’ve been offered a settlement agreement or compromise agreement, give us a call – it’s FREE. We can assist you through the process and may be able to help you negotiate a better deal. Usually, your employer will pay our fee, so our advice won’t cost you a penny.
Here’s a quick Q&A to help you get familiar with the terminology.
What is a settlement agreement?
A settlement agreement is a legally binding document. Usually, an employer pays an employee money in return for agreeing not to take the employer to court. Because it’s legally binding, the employee has to take independent legal advice before they sign (that’s where we come in).
What is a compromise agreement?
A compromise agreement is exactly the same as a settlement agreement. That’s what the document used to be called in the rest of the UK, and is what it is still called in Northern Ireland.
Why is a settlement agreement or compromise agreement a good idea?
It’s usually a good idea to reach agreement and settle out of court, because you get confidence you’ll receive an agreed amount of money rather than take your chances in court, and your employer gets confidence that you’re not going to take court action against them. It’s reassuring for all parties involved.
By the way, when we say ‘court’, we also mean employment tribunal.
When might you be offered a settlement agreement or compromise agreement?
In most cases, you’ll be offered a settlement agreement or compromise agreement when your contract of employment is terminated, perhaps because your role has been made redundant. Sometimes, it might be because your employer has mistreated you at work, and they are paying you compensation.
Note that you you do not have to accept your employer’s first offer. In fact, you should be allowed a reasonable amount of time (Acas suggests 10 days) to consider the terms you’ve been offered.
If you’re involved in an ongoing dispute with your employer, we can help you sort things out.
When can you request a settlement agreement or compromise agreement?
You can request a settlement agreement or compromise agreement when you’ve raised a grievance with your employer that hasn’t been resolved, or they’ve broken their side of their employment contract with you, or the working relationship has irretrievably broken down.
If you want to ask your employer for a settlement agreement or compromise agreement, we can help you work out the best approach and negotiate the best deal.
What’s included in a settlement agreement or compromise agreement?
The agreement won’t only include money in return for not taking your employer to court. It can also include other elements that benefit you, or indeed, your employer (that’s where our negotiating skills come in).
There are many negotiables. For example, you might want a good reference to help you get another job. And your employer might want you to promise not to work for a direct competitor for a period of time.
You’ll also want to know exactly what’s included in the financial offering (such as outstanding holiday pay and bonuses), as well as the tax implications. For example, it’s worth knowing that, if you’ve lost your job, the first £30,000 is usually free of tax and national insurance deductions.
As you can no doubt tell, there’s a lot to consider. We deal with these matters all the time, and the initial conversation is free. So, if you’re in a situation where you’ve been offered a settlement agreement or compromise agreement, just give us a call. If you’re near one of our offices, you can make an appointment to pop in for a chat.
Further reading
We’ve written about settlement agreements and compromise agreements before. Here are just a few of our relevant articles which you might find useful:
- Settlement agreements and compromise agreements
- How do I get a settlement agreement?
- What is a settlement agreement?
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