The start of the credit crunch has been pinpointed to 9th August 2007. Almost three years later, companies are still finding themselves hard-hit by the economic downturn. Businesses are being forced to make redundancies in their work force. This can involve a reduction in the type of job required or possibly the complete closure of a business or department. In any case the total reorganisation of a workforce could leave you out in the cold.
The use of compromise agreements in redundancy is often initiated by employers. Even though the termination of your contract may not be contentious, your employer may still want to make sure that no employment tribunal claim is brought against them. For an employer it’s a no-brainer, the extra cost of a compromise agreement is trivial compared with the legal fees, stress and time lost to contest a Tribunal claim.
As an employee who’s contract is being terminated, why should you sign something which waives your right to make any future claims against your employer? The compromise agreement will turn your redundancy package into a full and final settlement.
It is your opportunity to get the best deal for you. The agreement can provide full details of what compensation you will receive and what proportion of this will be tax-free. As well as this, it allows for rules to be agreed, such as the employee working for fellow competitors or certain customers, if this is not already covered in the service contract.
However you may have been left thinking, ‘why was I chosen?Employees often get the impression that their particular redundancy was unfair, sometimes they will feel discriminated against, for example; that they were the cheapest person to get rid off. If you are unhappy with the compromise agreement there is no legal obligation to sign it.
Refusing to sign simply means there is no agreement and you will be free to make a claim to the employment tribunal. In redundancy cases, however, this could mean that your employer would refuse to pay you the full enhanced package and will instead pay the minimum state entitlement.
In this case, as with any legal matter, it is best to contact specialist compromise agreement solicitors who will be able to offer expert advice. It also offers you the chance to put grudges aside, give you greater freedom and peace of mind.
Bonallack & Bishop are specialist compromise agreement solicitors with particular experience of advising on any redundancy compromise agreement. Tim Bishop is senior partner at the firm, responsible for all major strategic decisions. He has grown the firm by 1000% in 13 years and has strong plans for continued expansion.