A compromise agreement is a legally binding document, between an employer and employee, utilised to effectively terminate an employee’s employment, without the concern of the employee lodging industrial tribunal proceedings thereafter, in relation to the employment or the termination of same.
Normally, an offer of compensation (for example, an enhanced redundancy package) is made in consideration of the employee agreeing not pursue such legal action against the employer.
Advice from a solicitor is essential throughout the process. The agreement must be in writing; and the employee must have the compromise agreement, and the effect same has on his/her ability to pursue their rights in a tribunal, explained by an independent solicitor before the agreement can be considered binding. The solicitor giving the independent advice must also sign the agreement (as well as the employee and employer) and certify that the appropriate advice was provided.
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