Compromise Agreement
COMPROMISE AGREEMENT SOLICITORS NEWCASTLE
Newcastle solicitors are experts in advising employees on compromise agreements and we offer a fast service, almost always on the same day. With compromise agreements, the standard practice is for the employer to pay the employee’s cost for obtaining independent advice, which advice is necessary in order for the agreement to be binding. This means there is rarely any charge for employees to instruct us on a compromise agreement.
These agreements are offered by employers in a wide variety of situations,. The agreement itself is typically very standard; the reason for this is that compromise agreements were created by Government made law (statute) and must contain the required clauses to comply with the statute.
What are the usual clauses ?
- A compromise agreement will generally include a breakdown of payments to be made to the employee comprising contractual notice, an ex gratia payment and any other contractual entitlements
- Payments which relate to contractual entitlements are generally taxed
- Up to £30,000 the ex gratia compensation aspect can be tax free
- Many agreements contain confidentiality clauses as regards any disputes and the agreement itself
- Some agreements contain clauses whereby the employee agrees not to compete or work for a competitor for a set periods, and a small further sum may be paid for this additional commitment, typically a few hundred pounds
- There is a long list of various Acts which the employee will agree not to make any claims on
Is there a going rate for the amount you should receive – the ex gratia or compensation amount ?
Each situation varies but one of the more unusual aspects of compromise agreements is that, in our experience, the typical ex gratia or compensation offer made is generally the equivalent of 2-4 months salary. There are technical reasons for this, which we will be happy to explain. Any negotiations, up to several hours of work, if needed, will be part of the fee paid by the employer for our advice to you as employee on a compromise agreement.
Please contact us now for immediate, free initial advice