A compromise agreement is a document which legally records an agreed termination or severance package between employer and employee.

When an employer is terminating an employee’s employment they can offer the employee terms of a compromise agreement. If agreed, this results in a mutual termination of employment where the employer “buys” the employee's legal rights and potential employment tribunal claims for an agreed fee.

As a compromise agreement is such an important document, the employee must receive independent legal advice on the terms and effect of the compromise agreement. The independent solicitor must then sign the document to make it legally binding. It is common practice that the employer contributes towards the legal fees of instructing a solicitor and that the employee be at liberty to choose which solicitor they wish to instruct.

If you have been offered a compromise agreement, please complete the free enquiry form.