What is this Compromise Agreement for?
As an employer, you can use this Compromise Agreement after negotiating a settlement with an employee whose contract is being terminated and you want to ensure that the employee cannot then bring a claim at court against the employer.
An employer will normally use this form of compromise agreement to settle disputes with a ‘bad leaver’. In that case, be sure to mention any specific claim that is being settled. This type of agreement is quite complicated. Among other things the employee will need to get independent legal advice before signing it.
For a simpler form of settlement agreement where the employee leaves on friendly terms, with or without agoodwill payment, see our document E132, Employment Termination Agreement
What detailed terms does the agreement contain?
This twenty page document contains 18 clauses covering:
- definitions and interpretation
- termination of employment
- termination payments
- pension (as applicable)
- company car (as applicable)
- outplacement counselling (as applicable)
- agreements & warranties
- reference
- resignation from offices (as applicable)
- garden leave (as applicable)
- restrictive covenants
- tribunal proceedings (as applicable)
- return of company property
- confidentiality and announcements
- legal fees
- statutory conditions satisfied
- general provisions and governing law
- the scope of the agreement
In addition, 5 Schedules cover the adviser’s certificate in relation to employee agreements and warranties, calculation of the statutory redundancy payment, employee reference, announcement and post-termination restrictions.
For more information on each of these sections, see our Explanatory Notes which you will receive when you download the document from our website.
While you are here, have a look at our template employment contracts and employment policies & procedures.
When I download the document, can I change it and/or use it more than once?
Yes, all ContractStore’s templates are in MS Word and you can use the document on more than one project. For more information, watch the video on this page of our website or see our FAQs
Legal support
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Contract author: Philippa Wood
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You may also find these contracts of use:
Employment Termination Agreement (E132)
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