Compromise Agreement FAQ and Tips

by DerekFinegan on February 20, 2013

  • SumoMe

Compromise agreement is something quite commonly offered to the worker by his/her employer. However, many people have doubts and questions about it and are unsure whether it protects their interests or works against them. Therefore, the following lines will answer some of the most frequently asked questions regarding this document and its effects.

Q: What is a Compromise Agreement?

A: Well, simply put, it is a document which is given to an employee before he/she gets sacked or stops working for a certain employer. The entire compromise, basically, lies in the fact that you sign an agreement form through which you give up your chance of making any legal claims against your employer or any complaints whatsoever, in return for a termination payment and other benefits once you leave the work post. Thus, this agreement prevents you from issuing any unfair or wrongful dismissal claims, discrimination claims or any other claims which potentially compromise the employer due to his/her disobedience of the contract he/she made with you.

Q: When is this document given to me?

A: Compromise agreements are usually offered to the employees after a dispute likely to end up with the employee’s resignation or sacking. The employers commonly give it in order to protect themselves from any claims pursued by the Employment Tribunal. In return for this protection, they offer monetary compensation and certain other benefits the two parties can agree upon.

Compromise agreements can also emerge before a certain number of employees are to be laid off or when the only way of settlement between an employer and a leaving employee is through a severance payment suitable for both of them.

Q: How does a Compromise Agreement look like?

A: Compromise Agreement is not always a formal, signed document and may even be passed without the official title. Rather, it might be labeled Severance Agreement, Termination Agreement or, simply, a formal letter from your superiors. Yet, there are parts of the letter which might indicate a compromise agreement such as any requirements to take legal advice or referring to the “section 203 of the Employment Rights Act 1996”. Also, any document which mentions your right to go to an Employment Tribunal may be a compromise agreement; make sure you read it carefully. Contacting an employment layer on the matter would be a recommended thing to do in these situations.

Q: Who benefits from a Compromise Agreement?

A: Basically, it is a tool that your employer uses to protect him/herself. Nevertheless, if you think that the settlement he/she offers is not suitable, you have full right to contact a solicitor and ask for a second opinion. Usually, employment attorneys can assess the offer and help you get a settlement you can be satisfied with.

Q: Is the Compromise Agreement only about money?

A: No. Even more so, it can stand for many different things like keeping assets, dealing with confidential information and what you do with it once you leave the work post, references for your future employment etc.

Q: What to do once you get a Compromise Agreement

A: The best step to take once your realize that you leaving your job is an inevitable scenario is to contact a solicitor or some other labor law professionals and ask for their opinions and assistance.



Derek is a freelance journalist with over five years experience in writing, editing and researching legal topics. At the moment he's specially interested in immigration law since his wife is an immigrant.

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  • Bartlett Workplace

    Thanks Derek… Great information put together and your efforts are really appreciated… Keep posting such useful stuff more…

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