Croydon Solicitors

CROYDON EMPLOYMENT SOLICITORS – COMPROMISE AGREEMENT FAQS

What does “without prejudice & subject to contract” mean?

These words, when incorporated onto any letter or document are designed to prevent that letter or document being shown to a Court or Tribunal.  Such wording is incorporated to enable a party to negotiate without fear of compromising his/her or it’s position in the event negotiations fail. Compromise agreements are consequently offered on a without prejudice & subject to contract basis until they are signed by both parties, when they become open, binding and enforceable agreements which can be produced in court or Tribunal for enforcement purposes (which is rare).

As employer should I set a deadline for the Agreement to be signed?

This is a common tactic by employers to ensure that the Agreement is concluded rapidly. Whilst any deadline should not be ignored, in practice, many employers will still agree to conclude the Compromise Agreement even if there is a delay due to negotiation or stand off between the parties resulting in the deadline passing.

Can my employee tell anyone about the Compromise Agreement?

Nearly all Compromise Agreements include a standard confidentiality agreement. Sometimes this only covers the terms of the amount offered in the Agreement. However, in some cases it covers the existence of a Compromise Agreement which means the employee will be in breach of the agreement if information “leaks”. Usually there are exceptions to this rule so it does not apply to immediate family, spouse and professional advisers.

What terms should we offer about timing of payments ?

Once all parties have signed a Compromise Agreement, compensation is usually paid within 7-21 days. However, certain payments will be made through the payroll on the usual payroll date such as outstanding salary and accrued holiday and bonuses or commission payments.

Possible Claims After Signing a Compromise Agreement

As a rule, there are only three types of claim that can still be made after a compromise agreement has been signed. These are:

1. Personal Injury – This type of claim is generally still allowed, excepting claims for injuries that were already existing at the time the agreement was signed. If the termination was due to absence for stress or depression, it is unlikely that the claim would be allowed.

2. Pension Rights – A claim for accrued pension rights should still be possible.

3. Breach of Contract – If  either party has breached the terms and conditions  in the compromise agreement.

How long does it take to finalise a compromise agreement ?

On e advantage of these agreements is that they do tend to be concluded very quickly, often with days of offer, as the agreements themselves, subject to the issue of acceptable compenstaion for the employee, are very standard.It is be possible to sign off the agreement on the day we meet.

Can I/should I withdraw a compromise agreement offer entirely ?

This is possible until the agreement is signed and a deadline for a compromise agreement to be concluded is often part of the offer made. Withdrawal of the offer is sometime threatened but generally does not occur unless there is real friction or important new information comes to light.