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Compromise Agreements - 05.05.06

Q I recently made one of the employees of my business redundant. It was all done on friendly terms and we reached a settlement acceptable to us both. However, 2 weeks later I received a claim from him for unfair dismissal. Can he make such a claim?

A. The law provides special protection for employees which they cannot easily give away. Therefore even though you reached an agreement directly with your employee, provided he meets the appropriate requirements, he may still be able to make a claim for unfair dismissal as well as potentially other statutory claims such as unlawful deduction of wages or unlawful discrimination.

Q. Is there any way I could have avoided this situation?

A. Yes, the most common solution is for you to enter what is known as a compromise agreement with your employee. This is a written agreement, which specifies the terms upon which the employment is being ended. Provided the employee received legal advice prior to signing the agreement, it would then be binding upon him. This would then prevent the employee later bringing any claims against you.

Q Could I prepare this agreement myself?

A. We would advise you against this. It is vital that it is properly prepared to ensure that the agreement is completely watertight.

Patterson, Glenton & Stracey have 125 years experience of providing legal services to the people of South Tyneside. Their expertise covers the whole range of legal services including property, litigation, matrimonial and wills and probate. Advice in this column is for information only and should not be used as the basis of legal action. Questions about legal problems should be forwarded to Keith Swan at Patterson, Glenton & Stracey, Law Court Chambers, South Shields, Tyne & Wear NE33 1AW.

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