Compromise Agreements Between Staff Members
Posted on 02. Mar, 2011 by admin in World Finance
A compromise agreement is an agreement made between an employer and an employee at the point where the employee’s contract is ended. It is an agreement that means the employee will not be able to make further claims against the employer at an employment tribunal. This has particular benefits with redundancy being one of the largest.
A compromise agreement can be used when a company is making people redundant. If they were not to correctly follow the law then anyone made redundant could in theory take them to a tribunal to claim for compensation. A compromise agreement turns the redundancy payment into a full and final settlement. The result of this is that the employee who is made redundant has then basically signed away their right to further compensation. For this it is likely the redundancy payment will be increased to cover the fact it is a final payment.
While a compromise agreement is a relatively new thing it clearly has its benefits removing reasons for a timely and costly process of going to a tribunal where in many situations it is settled out of court a few days before. This compromise agreement method can make things quicker so that both parties can simply move on. This can be better for all parties concerned and can be done by specialist employment solicitors.