Compromise Settlement Agreements

Mark Matthews Solicitors are well versed in the provision of employee, employer settlement agreements and can retained to draw up the agreement acting on behalf of an employer, or retained to act on behalf of an employee and advice them on an agreement they have been given. ***.

*** We can not act on behalf of both parties at the same time. Rest assured in order to offer objective legal advice it is not acceptable to act for both parties.

What is a Compromise Settlement Agreement

As the name suggests a compromise settlement agreement also know as a settlement agreement or compromise agreement, is an agreement made between the employer and the employee and sets out a legally binding contract which waives an employee’s right to bring a claim through an employment tribunal in the event the documented circumstances are met.

Why have a Settlement Agreement

Settlement Agreements can be negotiated to cope with the possibility of the occurrence of a predefined circumstance, and how it should be dealt with within the organisation, thus avoiding the costly process of an employment tribunal. Often an employer will pay a fee to the employee in consideration of acceptance of the agreement and the waiver of employee rights.

From an employee point of view it is also possible to include settlement conditions and payouts in an agreement should an employer terminate the employment of the employee for any specified or unspecified reason.

Remember these agreements are called compromise agreements and as such are not just one sided in favour of the employer, but can be used to the benefit of the employee.

What soft of circumstances can be covered by Settlement Agreements

This is not an exhaustive list of circumstances that can be covered by these agreements but is meant as an example, there is really no limit as to the items that may be placed into a compromise agreement.

  • Grievance Handling Process
  • Performance Monitoring / Management
  • Long Term Sickness Solutions
  • Redundancy Terms
  • Unfair Dismissal Claims

Who Pays The Costs

It is normal practice for the employer to pay all the costs of obtaining legal advice pertaining to a Compromise Settlement Agreement. This will usually be documented within the agreement text, however the maximum value of any legal advice payment may be capped. It is a requirement that an employee be given independent legal advice before signing an agreement and making it a legally binding contract between the two parties.

If there is a cap, the limit is usually set at a predefined rate that would normally allow the full costs of the employee’s required legal advice to explain the document and complete the contract as is.

If you enter into a negotiation rather than accepting the agreement as is, the costs of legal advice may rise above the cap, leaving you to settle any costs beyond the cap limit. This is because a negotiation may mean a protracted exchange between the employer and employee and their representatives, thus incurring unexpected extended charges.

Once you instruct us to act on your behalf with regard to an agreement issued by an employer to an employee we will recover the costs from the employer at the pre agreed rate(s) subject to the cap limits, at which point you may become liable for additional charges should the matter require further legal representation/advice.