Should you consider a compromise agreement?

Then there’s the financial cost, which can run into thousands of pounds for both parties and, for a company, the associated damage to your business name, reputation and, to a certain degree, your integrity or brand image.

No-one likes their shortcomings discussed in public; whether an employer or an employee.

If a claim goes before an employment tribunal then there is a very high probability that someone outside your organisation will be able to observe the hearing and, if they work in the media, can report freely on what you have or have not done, how many times and to whom.

Even if you win in the tribunal you may still lose in the media. This is something completely outside your control. The simplest way to ensure you avoid being taken to a tribunal or other court of law by an employee or former employee is not only to deal with employees fairly (whether via a disciplinary procedure or grievance process) but to consider offering a compromise agreement. What’s that? Put simply. The two of you agree to part ways on condition that you pay to the employee a sum of money in return for which the employee finishes working and agrees not to make any claims to an employment tribunal or other court of law. This is all agreed and recorded in a legally binding and confidential document and without admissions of wrong doing, or liability, on either part.

A compromise agreement works well in most situations as it eliminates the risk of a hearing, it eliminates the risk of stories leaking out about what may or may not have happened, it costs a fraction of what a solicitor would charge you to defend a Tribunal or court case, but above all it is private; no-one other than those involved need to know the details.

So whether you are an employer looking to dismiss someone or an employee who thinks they may have a claim for unfair dismissal but would rather avoid pursuing the matter to a full hearing; a compromise agreement could be what you are looking for.