Solicitors in Swansea.

Compromise Agreement FAQs – Employment lawyers Swansea

What is required for a legally valid compromise agreement?

A compromise agreement must be:

• In writing
• In line with statutory requirements
• The employee must seek independent legal advice

What is independent legal advice?

The most important point is that the advice comes from someone qualified and independent of the employer.  You should tell your employee to seek legal advice from:

• An independent solicitor who is not connected with the business i.e. is not “in-house”
• Someone from an advice centre, such as the Citizen’s Advice Bureau
• A registered Trade Union officer

What types of claim will the employee waive if they sign the compromise agreement?

The employee will waive most employment related claims and will therefore be unable to take you to an employment tribunal.  However, you will not be able to bar the employee from pursuing personal injury claims, claims related to pensions or breach of the compromise agreement itself.

What is ordinarily included in a compromise agreement ?

Although every case is different, a standard compromise agreement will include terms relating to:

• The amount of compensation which is offered (tax free for payments up to £30,000).
• Tax indemnities, which make the employee responsible for any tax contributions required under the agreement (such as National Insurance).
• Confidentiality clauses, which can compel the employee to keep either the existence or the content of the agreement confidential.
• Compelling the employee (and for that matter, the employer) to not make derogatory comments against the employer
• Whether payment in lieu of notice will apply
• The employee’s agreement to waive rights to pursue certain claims bar personal injury, breach of contract (for the agreement itself) and pension claims.
• The employers agreement to provide a reference for the employee (although there is no legal requirement that an employer does this).

Who usually pays for the agreement ?

Whilst employers are not legally obliged to pay for the employee’s legal costs, it is usually the case.

Can I ask my employee to take gardening leave ?

Yes you can if there is a gardening leave clause in the original employment contract. If you ask your employee to take gardening leave, they will stay at home and still be paid by the employer.  Gardening leave is usually used to prevent employees from causing disruption in the workplace or luring the employer’s clients and customers to use the employee’s services.

Contact Swansea solicitors for any additional compromise agreements help.