Why do I have to sign a Compromise Agreement?

If you have been involved in a dispute with your employer, or if you have been made redundant, your employer will probably ask you to sign a Compromise Agreement.

Compromise Agreements are used by employers to draw a line under the dispute and ensure that employees who sign them cannot bring any claims against them in the Court or tribunal, now or in the future. In return for you giving up your rights to bring most claims, you will receive a compensation payment and certain additional benefits. If you did not sign the Agreement, your employer would most probably not be paying you as much.

Why do I need to have the Agreement signed by a solicitor?

Compromise Agreements are only legally binding once you have received advice from an independent legal adviser (eg. a solicitor or certified trade union officer) on the terms of the Compromise Agreement and the effect of signing it on your employment rights.

Will I have to pay CWJ for their advice?

We charge a minimum fee of £350 plus VAT for advising on Compromise Agreements. This will usually cover the time spent in a meeting for up to one hour, where we will give you independent legal advice on the terms of the Agreement, advise you briefly on the potential claims you may have and deal with the formalities associated with signature of the Agreement. This fee, or at least part of it, will often be paid by the employer as part of the package.

Our charges will exceed the minimum fee if the Agreement is less straightforward, or if you ask us to consider other documentation, or if you ask us to get involved in negotiating an improved compensation package, or different wording for the Agreement, or to provide detailed advice on the prospects of success of your potential claims and likely compensation. In these circumstances, we will charge you at our normal hourly rates (£190 – £265 plus VAT per hour depending on the solicitor dealing with your case). As part of negotiations, we can ask for your employer to increase their contribution, however they do not always agree. If so, the balance of our fees over the employer’s contribution will be your responsibility.

Your employer will usually only pay their contribution if the Agreement is signed. Therefore, if you meet with us and decide not to sign the Agreement, you will be responsible for our fees in full at our normal hourly rates.

I am not happy with the package on offer. Can I negotiate for a better one?

When we meet with you, we will advise you briefly regarding any potential claims that you may be giving up by signing the Agreement. There may be grounds for negotiation if we establish that you will be signing away your rights to bring a substantial claim for compensation. However, you should bear in mind the costs associated bringing a tribunal claim and the risk that you may not win. Please note that we can never guarantee that negotiations will be successful and your employer will not generally agree to cover the cost of these negotiations.

My reference seems a bit brief. Can I negotiate for a better one?

There is no obligation in law for an employer to provide a reference. Any reference that is provided must be true, accurate and fair. Many employers (particularly the larger ones) are reluctant to provide detailed references and often make it their policy only to give out basic information about job title, dates of employment and reason for leaving. If you would like us to try to negotiate a better reference for you, we are happy to try. As above, there is likely to be an additional charge to you for this negotiation.

Can I tell anyone about the Agreement?

This depends whether there is a confidentiality clause in the Agreement. We will advise you specifically what you are allowed to say, if anything, after signing your Agreement and to whom.

If you have been given a Compromise Agreement by your employer and would like to speak to one of our specialist solicitors for further advice, please contact Rosa Brennan by email or telephone 01689 887872.