Compromise Agreements
In certain circumstances, such as redundancy or dismissal, a compromise agreement can be used instead of pursuing an employment tribunal dismissal claim. Following the termination of your employment, your employer may ask you to sign a compromise agreement, which is a legally binding document that provides for a settlement or severance payment. In return, you agree not to pursue any claim you may have to an employment tribunal.
Under the Employment Rights Act 1996, employees must seek legal advice on the compromise agreement from a qualified solicitor or trade union adviser. In most cases, the employer will contribute toward the legal expenses incurred in receiving this advice.