What are the benefits of a compromise agreement ?

Have you had to let a member of staff go in unfortunate circumstances? 

Could the dismissal be considered to be unfair or discriminatory? When this happens, employees may be entitled to take legal action against the company, potentially sullying your brand and causing internal and external chaos. If affiliation between the two parties has ended in unpleasant terms then you may want to consider entering a compromise agreement. Some of the benefits of this agreement include:

Avoiding bad publicity

If you are letting an employee go for reasons that are questionable and could be seen as employment discrimination this could serious damage your reputation if it reaches the media. By entering into a compromise agreement you can avoid any unwanted publicity, paying the employee to waiver their legal rights and not broadcast their story. By making an agreement with the employee and giving them compensation can legally safeguard your company’s brand name.

Cases don’t appear before tribunals 

Tribunals can be very costly in terms of money, time and image - most employers will want to avoid them at all costs. This can be done by trying to solve the dispute without a hearing or giving an employee compensation to drop their claim. There has been a huge increase in the number of personal compensation claims being made over the last couple of years – on the top of the list are claims regarding unfair dismissal and employment discrimination. If the employee is found to have been unfairly treated, then there is no upper limit to the amount of compensation they receive.

Reduce the amount of legal cost

Going through tribunals and claims courts can be a very costly process, with money being spent on solicitors, researchers and legal documents before you even start the proceedings. As the employer, losing the case will also mean that you are likely to have to pay out more in order to cover your ex-employee’s legal fees as well. By entering into a compromise agreement you can cut down on the amount of time and cost that would otherwise be spent on taking the case to court.

Leave on good terms with no rebukes

Despite what people may say, all PR is not good PR – if you have an ex-employee who is constantly bad-mouthing your business, insulting your practices and making others second guess your organisation then it can be very bad for business. This can be prevented by legally outlining the terms of their dismissal through a compromise agreement, giving them money and a good reference to stop them from slandering your company. If there are any occasions where this happens after the agreement is signed, then would be in breach of contract and legal action can be taken.

Quick resolve

If you want to quickly terminate an employee’s contract without causing problems and breaching employment rights then this legal document will allow you to do so. Compromise agreements let an employee relinquish their rights and accept compensation for their change of circumstances. This is the only way that you as an employer can be sure that you can quickly, legally and effectively remove a member of staff who hasn’t technically breached their employment contract.

If you’re an employee or an employer and are contemplating entering into a compromise agreement then you will need to seek legal advice in order to ensure both parties receive a fair deal. Blandy and Blandy are specialist employment lawyers who have years’ of experience handling compromise agreements, find out how Blandy can help by visiting their website today.

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