A compromise or settlement agreement is a statutory arrangement involving an offer from an employer to an employee to agree to mutually terminate the employment relationship, usually to pay salary to a certain date, to pay part or all of the contractual notice period and often make an ex gratia payment.
This type of arrangement may well be offered to employees who have suffered stress at work as a means of getting rid of them before they make a formal application to the court for compensation.
Put simply its cheaper for an employer to try to buy off an employee rather than pay substantial damages for psychiatric illness caused by the employers negligence.
When acting for an employee, in the vast majority of cases, our stress at work solicitors can:-work within the employers budget, so there is no charge to you as employeetake your instructions very quickly, generally on the same dayadvise you by telephone/fax/email so you do not have to attend our officesWhat is a settlement Agreement?This document, usually drafted by a specialist employment solicitor, is intended to be a binding, legal agreement between an employer and an employee, entered into following the employees termination of employment.
There are certain key matters that most all agreements cover :- Amount of compensation to be paid, including any tax-free component Any restrictions being placed on future employment Confidential matters, such as trade secrets and the terms of the agreement Any assurances given by the employer and/or employee The reference that will be given by the employer Settlement of any claims which the employer may have against the employee What the other employees will be told about the termination Mutual agreement not to make derogatory commentsIn the proposed document you will see a long list of statutes under which you are agreeing not to bring claims including stress compensation claims.
What are the requirements to be valid?The following requirements must be met in order for the document to be valid :- It must be in writing It must relate to a specific complaint held by the employee It must identify the adviser The adviser must carry professional indemnity insurance All requisite conditions must have been metThe employee must receive legal advice from a qualified independent adviser, which includes a compromise / settlement agreement solicitor, regarding the terms of the proposed agreement as well as its effect on the employees ability to make a complaint to an Employment Tribunal As mentioned above, the law requires that an employee obtain legal advice before signing in order for the agreement to be valid.