Compromise agreements are commonly entered into when employers seek to terminate an employee’s employment. It is a legally binding agreement under which the employee agrees to settle their potential claims in return for the employer agreeing to pay financial compensation. The agreement will also include other things of benefit to the employee, such as an agreed reference letter. In order for a compromise agreement to be binding, the law requires that the employee receives independent legal advice on the terms of the agreement.
We regularly draft compromise agreements for employers and negotiate the terms on behalf of employees.