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Compromise Agreements

In these times of austerity it is unfortunately an economic fact that many employers – particularly local government, will seek to cut costs by reducing their staff. Very often this is arranged via schemes providing for voluntary redundancy.

The Personnel Department in conjunction with the Employers Legal Department will produce a document which is often referred to as a Compromise Agreement. This is an Agreement which will provide the terms for payment on severance of the employment. At the same time the Agreement will contain clauses which prohibit the employee from bringing any form of claim against the employer in any of a whole range of employment legislation.

For example:

Section 147 of the Equality Act 2010;

Section 77(4A) of the Sex Discrimination Act 1975 (in relation to claims under that Act and the Equal Pay Act 1970;

Section 72(4A) of the Race Relations act 1976;

Paragraph 2 of Schedule 3A to the Disability Discrimination Act 1995;

Paragraph 2(2) of Schedule 4 to the Employment Equality (Sexual Orientation) Regulations 2003;

Paragraph 2(2) of Schedule 4 to the Employment Equality (Religion or Belief) Regulations 2003;

Paragraph 2(2) of Schedule 5 to the Employment Equality (Age) Regulations 2006;

Section 288(2B) of the Trade Union and Labour Relations (Consolidation) Act 1992;

Section 203(3) of the Employment Rights Act 1996;

Regulation 35(3) of the Working Time Regulations 1998;

Section 49(4) of the National Minimum Wage Act 1998;

Regulation 41(4) of the Transnational Information and Consultation etc. Regulations 1999;

Regulation 9 of the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2002.

The only exception being a potential claim for Personal Injury and even then there will often be a term which provides that “the employee is not aware of any claim against the employer for personal injury”.

There will also be a range of other clauses e.g., confidentiality and return of property to employer not to make disparaging comments about the employer and the provision of a reference.

Sometimes, depending upon the nature of the employment there may also be clauses which prevent the employee from sharing trade secrets and/or from working for a similar type of employer within a particular region and for a certain period of time e.g., not to work in Manchester for 12 months. These are referred to as restraint of trade clauses and they can be challenged if they are too restrictive.

These Compromise Agreements are also often used by employers to settle a grievance made by an employee thereby avoiding an action in an Employment Tribunal.

Compromise Agreements will always make provision for a Certificate to be completed by an Independent Solicitor that the employee has had the benefit of legal advice upon the Agreement before it was signed by him/her. If it does not then the Agreement will not be legally binding upon the employee. For this reason the Agreement will always provide that the employer will pay the reasonable legal fees of the Solicitor appointed by the employee. Thus, the employee is not put to any legal expense in obtaining the independent advice from a solicitor of his/her own choosing.

Here at Craig Gee Solicitors we have many years experience and have developed considerable expertise upon advising clients upon the terms of Compromise Agreements.

We will advise you specifically upon the terms of the settlement and whether the sum offered should be accepted.

We will further advise you upon all of the other terms in the agreement to ensure your legal interests are not being unfairly curtailed.

If therefore you are being offered an Agreement by your employer, give us a call on 0161 666 9999 to arrange a convenient appointment.

Remember, there will be no charge to you.

We are regulated by the SRA Number: 421472

Also certified ISO 9001

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