Law Society warns on compromise deals
Compromise agreements, which rely on an employer giving a financial settlement to prevent an employee making a court claim, may be depriving workers of the exit deals they deserve, the Law Society has warned.
The settlements have proliferated in the recession, with firms suspected of using them to avoid unfair dismissal, unlawful discrimination and redundancy claims.
Employees legally must have received independent advice before they can consent to the agreements, the Law Society has reminded firms, as the settlement offered may fall short of a court ruling.
According to the society, employers will typically pay or contribute towards the legal expenses incurred in receiving the legal advice on the agreement.
President of the society, Robert Heslett, said: "Compromise agreements are an effective tool in ensuring both employer and employee can resolve an issue fairly. However, the agreements will usually emanate from the employer and employees should not take it as read that it is the best deal on the table."
Compromise agreements can include clauses that go beyond the simple compromise of potential tribunal claims, the Society says, for example clauses about not competing with the employer in the future or the return or retention of the employer's equipment.