I’ve noticed a disturbing tendency recently for some employers to tell redundant employees that they will only contribute to their legal costs incurred by a third party solicitor reviewing the compromise agreement if the employee uses the firm of solicitor nominated by the company. If the employee wants to go to a solicitor of their own choice they will have to pay all the legal costs associated with the advice they receive, without any contribution from the employer. Remember that it is a legal requirement that a compromise agreement be reviewed by an independent solicitor in order to make the agreement legally binding.
Employment Law Explained
Category Archives: compromise agreements
Coulson’s Compromise Agreement: So What?
I’ve been away in France for a couple of weeks, hence the silence on this blog. It’s now time to burn off those calories with some serious typing and what better start than on a story that Robert Peston ran on his BBC blog on the 22nd August (apologies if this is staler than yesterday’s croissant)? Under a headline “Coulson got hundreds of thousands of pounds from News International”, Mr. Peston reported that Andy Coulson (yes, the one late of News International (NI) and News of the World) received several hundred thousand pounds in respect of
Just been made redundant? Don’t forget …
If your employment has just ended, not just for redundancy but for any reason, did you sign a compromise agreement? Perhaps you entered into a COT3 via ACAS to settle the dispute?
If you did there’s a good chance you will have signed up to a clause that says;
“You shall not at any time after the termination of your employment represent yourself as being interested in or employed by or in any way connected with [name of ex-employer]”
Compromise Agreements and The Equality Act
Employment Law is a fairly staid and unglamourous area of the law most of the time. Yes, some of the facts giving rise to disputes can be quite amusing but, in the main, practitioners are bogged down in a mire of statutes, regulations and reported cases. For instance, Laurie Anstis’s blog at Work/Life/Law has just highlighted a major drafting error in s.147(5) (a) of the Equality Act that makes it technically impossible for any solicitor to advise an employee with a compromise agreement settling a claim under the Equality Act. In Laurie’s words
Compromise Agreements: what are they?
This is a fairly common question. Basically a compromise agreement (aka termination or settlement agreement) is a legally binding contract between employer and employee whereby the employee accepts a financial package (usual elements include: compensation for loss of employment, notice monies, outplacement services provision, release of stock etc) in return for agreeing not to sue the employer for breach of contract, or unfair dismissal or for any discrimination related reason. The employee will also commonly agree to keep the agreement itself confidential and to say nothing about the employer’s trade secrets and affairs, amongst other requirements. In order to be legally binding the employee needs to take independent legal advice on the terms of the agreement from a qualified legal adviser – usually a solicitor. The employer will usually pay a contribution towards the cost of that advice to encourage the employee to get the advice.
Dale Langley & Co
In my day job I am a Partner in the above firm. We have recently relaunched our website and have started a Dale Langley blog. Initial comments have been favourable. I have just posted an article on a case concerning compromise agreements and why you should not delay in negotiating the terms or signing off. Please click here to go to the article.
I have also written on compromise agreements and what they are before – click here to read more.
As ever, if you would like me to help please contact me at michaelscutt@dalelangley.co.uk