Why have I received a compromise agreement?

Why have I received a compromise agreement?

The purpose of a compromise agreement is to provide businesses and employees an alternative to costly employment tribunals by having an agreement which will settle any claims relating to dismissal or any other issues that may end the employment relationship in the workplace.

The agreement will usually state that the employee will not pursue any claims against the business in return for financial compensation. The agreement can also cover remuneration, holiday pay and any other payments from the date of dismissal to the signing of the agreement.

Why has it been offered to me?

A compromise agreement may be offered in numerous circumstances, and it is usually when your employment is coming to an end.

These agreements may be voluntarily offered by your employer to avoid a drawn-out disciplinary, performance or redundancy process, which can often be costly and time-consuming and lead to ongoing contention unless drawn to an early close.

A compromise agreement can also be used where there is a dispute with your employer – again as a means of bringing that dispute to a close. In other words, it becomes the document that sets out the final terms that have been negotiated against the threat of a legal claim against your employer.

Do I have to agree to the compromise agreement?

While an employee may have been open to the idea of an agreement, they are not legally required to accept the agreement and can turn it down. If they turn down the agreement, they are free to make a claim against a business.

This also means that a company will be required to proceed down the dismissal procedural route to be able to dismiss them. It’s important to note that you as the Employer will still need to follow all disciplinary procedures if you decide to pursue dismissal, as they can arise at a tribunal.

Important next step

Compromise agreement terms need to be fair and agreed to by both parties. As employees are required to receive independent legal advice under the  Employment (Jersey) law 2003 and they will have to sign the agreement which must be witnessed by a Jersey lawyer.  At Parslows, our employment specialists provide highly experienced services to advise you in relation to your compromise agreement and assist you in the negotiations with your employer.

Please note that the information provided on this website is for general information purposes only and is designed to provide you with an outline of the legal services we offer. Whilst we endeavour to ensure our information is correct and useful, we make no representations or warranties regarding the accuracy or completeness of the information offered. Information on our website does not constitute legal advice and Parslows Jersey accepts no liability for any loss or damage arising out of, or in connection with, the information found in this website. Please consult a lawyer at Parslows Jersey in the event that you require professional assurance that our information, and your interpretation of the same, is correct.

For further advice please contact Parslows on 01534 630530 or click here.