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If you’re looking to enter into a compromise agreement then you’ll want to know that you’re receiving independent employment law advice from a qualified specialist employment solicitor who deals regularly with compromise agreements. Compromise agreements can be quite complex in certain circumstances and it’s therefore best if you get your compromise agreement advice from a specialist solicitor. However, prior to doing that you’ll want to know what your solicitor should be doing when analysing your compromise agreement and advising you. The (non-exhaustive) list below details just some of the things that an expert compromise agreement solicitor will look do when analysing your agreement:

  1. Analyse your prospects of success in your Employment Tribunal or civil court case
  2. Draw up a provisional schedule of loss to evaluate potential compensation
  3. Analyse the compensation package that you’re being offered by your employer
  4. Thoroughly analyse the wording of your compromise agreement
  5. Check whether there are new or reinforced restrictive covenants in your compromise agreement
  6. Check to see whether you’ll be taxed on your compromise agreement
  7. Make their best efforts to ensure that your compromise agreement is paid in a lump sum rather than in staged payments
  8. Negotiate your compromise agreement according to your instructions
  9. Not have any conflicts of interest that could harm your position

Analyse your prospects of success in your Employment Tribunal or civil court case

Whether it’s an unfair dismissal case, a breach of contract case or a discrimination case that you’re compromising your right to pursue your solicitor should be able to evaluate your chances of success in the claim. The rule of thumb is the stronger your case, the higher the value of compensation you should be looking for. However, the ability to thoroughly (and intuitively) analyse your case will only come with years of experience in dealing with compromise agreements and employment law claims.

Draw up a provisional schedule of loss to evaluate potential compensation

Your solicitor should draw up a provisional schedule of loss to evaluate what compensation may be payable to you if you were successful in an Employment Tribunal or civil court case. This schedule should reflect the probabilities of success in your case and any other mitigating factors. It will be used as a basis for evaluating what an appropriate value of compensation is.

Analyse the compensation package that you’re being offered by your employer

Your compromise agreement solicitor should break down the sum being offered analyse what you’re entitled to. The compromise agreement often doesn’t break down the total value into what’s payable which makes the nature of the offer hard to assess. Ideally your employer should provide you with a detailed schedule indicating why they’re offering you this particular sum. For example in a redundancy claim the value of the contractual benefits for your notice period should be included as well as any statutory or contractual redundancy payment. Your employer may also choose to include  a goodwill payment to you to encourage you to accept the agreement.

Thoroughly analyse the wording of the compromise agreement

This goes without saying, really. The best compromise agreement solicitors will thoroughly check the agreement and make sure that the wording is, wherever possible, in your favour. This often is of great importance and great value to employees and a failure to do so may mean that you’re disadvantaged in the future. Make sure your compromise agreement solicitor explains all the terms to you.

Check whether there are new or reinforced restrictive covenants in your compromise agreement

Although this ties in with the point above it is an extremely important issue. If the compromise agreement imposes new restrictive covenants on you (click here for an explanation of what restrictive covenants are) or reinforces old restrictive covenants then you should be offered extra money to compensate for this. Further, restrictive covenants can impede your ability to work after the termination of your employment and they should therefore be analysed with care.

Check to see whether you’ll be taxed on your compromise agreement

As any good compromise agreement solicitor knows, the first £30,000 of the compromise agreement is tax-free if it relates to a payment compensating the employee for the loss of their employment. Payments which aren’t relevant to termination but are, for example, contractual in nature are still liable for tax at the appropriate rate.

Negotiate your compromise agreement according to your instructions

Your compromise agreement solicitor has an obligation to provide you with legal advice but also to negotiate with your employer’s solicitor according to your instructions. If you ask them to, for example, increase the payment value then they should do so. This may be against their advice and if they object to the rejection of their advice then they may legitimately withdraw their representation.

Redmans are London employment lawyers

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Redmans Solicitors are a law firm based in Richmond, London. They are specialist employment lawyers and represent both employers and employees in the Employment Tribunal

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