Compromise Agreement (E133)

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

ContractStore supplies templates and is not a law firm.  Experienced lawyers write all our templates and we can arrange legal assistance for customers who need special terms in one of our documents or a bespoke template. . For more information see our Legal Services page.

And if you want to contact us see our Contacts page.

Contract author: Philippa Wood