Compromise Agreements





In the current economic climate with redundancies steeply rising I am seeing a lot more people, especially from the financial services sector, who need advice on the compromise agreement that has been given to them by HR.  Many people become confused or scared when confronted with a serious looking legal document that is probably highly unreadable. You’ll need to get advice from an independent solicitor to explain what the document means and what legal rights you are being asked to give up in return for a “package”.  I can help you with this: please give me a call  – 0207 464 8433 or email me at and I’ll be happy to help.






For more information on compromise agreements please see the article below which I wrote for a local newspaper in Canary Wharf in 2007.






“We see many people whose employment has or is about to come to an end, for whatever reason (but usually for redundancy) who come to us seeking advice. So what is a compromise agreement?  It is simply a legally binding agreement between employer and employee, where the latter has taken independent legal advice on the terms of the agreement and the legal rights that he or she is giving up.  The agreements can vary from a couple of sides of A4 to 15 or more pages of warranties, representations, waivers and other legal mumbo-jumbo. 


In essence though, all a compromise agreement does is enable the parties to resolve all claims (real or theoretical) between them, usually in return for the employee accepting a financial settlement.   Because the employee will be giving up their rights to sue for unfair dismissal or unlawful discrimination it is important that he or she is content with the package on offer, as once it is accepted a binding contract will have been created.


If you are unlucky enough (or perhaps not) to be the recipient of such an agreement, do look out for what are called “warranties” – a type of contractual promise – especially the ones that say you will repay all the monies given under the agreement if you are found to have breached confidentiality, or the clause that says you will repay all monies under the agreement if you are found to have committed a “material” breach of the terms of your employment contract at any time. 


Having said all that, compromise agreements are a neat and relatively hassle-free way for the parties to go their separate ways. And the best bit? The employer will usually contribute towards your legal fees.”







This article first appeared in the “Docklands” newspaper in April 2007 


One response

29 07 2009
Dale Langley & Co « Jobsworth

[…] Compromise Agreements […]

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