AgreementCompromise agreements

Where employment terminates as a result of redundancy or in other unhappy circumstances, it’s common for both parties to enter into a compromise agreement – also known as severance agreements or settlement agreements. 

Employers want these primarily to ensure that after they have paid a sum of money to dispose of any potential claims, they will not face any further demands and litigation. 

Employees want to see in return a legal obligation to pay what has been agreed, and possibly to provide references and other support as the employment ends. 

There are many other things that can also be achieved, for either side by well-drafted agreement of this nature.  An imaginative approach can produce additional benefits, including tax efficient payments. 

We have long experience of these agreements from both sides.  If acting for employers, we draft them.  Occasionally we draft even though we are acting for the employee. 

Normally where we are acting for an employee we are advising on a document that somebody else has prepared.  We usually have something to add and in many cases we have been able to achieve improved outcomes for our clients, sometimes at no additional or significant cost to the employer. 

A poorly drafted agreement can create problems in the future, or miss opportunities to make the most of the deal. 

Whether you are an employer faced with the task of presenting a draft agreement or an employee needing advice on one that you have been given, contact us now for expert help.