Compromise Agreement


This is when you have a legal dispute with your employer and your employer would like to amicably resolve the work place issue by requesting you to sign a compromise agreement which enable them to terminate your employment contract by mutual consent. In return your employer pays you some compensation for the loss of office.


If you have an unmanageable employee who is causing a hindrance to your business which has resulted in a loss of profit, low morale and your working relationship with this employee has become untenable. We will assess your business needs and provide you with practical solutions.

What is Compromise Agreement?

It is a legally binding contract between the employer and the employee with standard legal terms. A standard Compromise Agreement has a list of complex clauses and with the help of this agreement both employer and employee are able to manage their difficult working relationship. This agreement, if signed by the employee, gives consent to the employer to terminate the employment contract. The employer, in returns pays for the loss of earnings, notice pay, holiday pay and any outstanding wages. In effect, after signing this agreement, employee waives his employment rights. In effect employee will not be able to bring any claim in the Employment Tribunal or in the Civil County Court.

Redundancy Situations:

In some cases employees who are facing redundancy dismissal due to a workplace situation their employment contracts are terminated immediately by their employers with their consent. In this situation some employees may volunteer themselves to accept a redundancy package. It is always the employer’s solicitor who will draft a copy of a Compromise Agreement which is a very complex and legally worded document. Therefore, most employees find themselves in an unmanageable, financially difficult, and vulnerable position. However, it is legal to draft such a Compromise Agreement. An employee in such situation, should always take immediate legal assistance from a qualified employment solicitor, as an independent advisor, and who has Professional Indemnity Insurance cover. We can assist you to liaise with your employer’s solicitor and agree or request for an amendment of the terms and conditions of the compromise agreement in order to protect your interest.


Employees get a standard reference, outstanding wages, holiday pay, and a compensation for the loss of future earnings without any hassle. However, in few cases the employers pays nothing and don’t even provide a reference, because by law employer are under no legal obligation to give references. Employers are not allowed to make negligent false statements. Both parties are contractually bound to follow the terms of the agreement.

Other Invisible Benefits:

Both of the parties can agree to sign a dual confidentiality clause which means they will be able to disclose the terms and circumstances about the formation of such Compromise Agreement.
Some employees benefit by taking a standard reference from a former employer and commence work with the potential new employer and they move on with additional pay.

Why Choose Legal Comfort?

  • As our first point of contact, we suggest you to come along with all relevant papers with proof of your identity and one utility bill to comply with Money Laundering Regulations.
  • We will explain to you the terms of our retainer in our Client Care Letter.
  • We know both employer and employee in such a situation always find themselves in an extreme and vulnerable position, so in order to protect our client’s interest we offer them our advice and assistance.
  • As per the rules of professional conduct, we only act for either employer or employee. We always do conflict check to ensure that we follow the correct process.
  • We act fast and arrange the first appointment at your convenience.
  • We will also advice and explain the implications (including terms, meaning and effect) of signing such complex document in depth.
  • We will calculate correct wages and also negotiate on your behalf.
  • We will sign an adviser’s certificate, which is attached as Schedules to the Compromise Agreement.
  • We will follow the case till the end to ensure that both employer and employee act accordingly as per the terms and conditions of the Compromise Agreement.
  • We will give you verbal and written information, advice and guidance on Tax, PAYE and VAT liability but only in relation to the compromise agreement.
  • We will also take serious recovery action against the employer if they do not keep their promise to pay wages.
  • On conclusion of our involvement, we will send the copy of our invoice.
  • Your employer should cover the legal costs of your compromise agreement.
  • We can also offer you detail advice on the reasons for termination and reasonable prospects of any future claim.
  • If you are the employee, you should not delay because the employer always asks for limited time to make payments under compromise agreement.
  • Additionally, the employer can fix a deadline for you to act.
  • If you put forward a counter offer, there is always a risk you take because your employer might withdraw the original offer.

Legal Advice

If you are facing voluntary redundancy or your employer has offered you a copy of the Compromise Agreement to terminate your employment contract, then please contact us immediately for advice. Alternatively, you can email us your query or use our form.

Legal Advice Form

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