Compromise Agreement
COMPROMISE AGREEMENT SOLICITORS SWINDON
What is a Compromise Agreement?
A Compromise agreement is a legal tool which can provide employers with a way to avoid potential claims being brought against them by employees during the employment relationship. Maybe both parties want to bring to an end an employment relationship or perhaps an employee has a legitimate claim he wants to bring but the employer wants to settle the matter before it goes to a tribunal.
In either of these circumstances the compromise agreement would the ideal document to use. By entering into before a tribunal an employer can save time and costs on potentially expensive litigation and the employee can do the same and also get a good deal.
Basics of Compromise Agreements
Once entered into a Compromise Agreements prevent an employee from bringing a claim for redundancy, wrongful/unfair dismissal in exchange for the employer making a cash payment. What that cash payment is needs to be negotiated between the parties.
A compromise agreement can only be legally effective if both the employer and employee are given independent legal advice. For the employee the legal adviser must actually sign the compromise agreement to confirm that he has indeed advised the employee on what he is signing and that he understands the effects of doing so.
One of the main advantages for an employee in signing a compromise agreement is that most payments made under it are tax free for the first £30,000. However to make sure this money is tax free the agreements need to be drafted properly.
Swindon solicitors are specialist advisers with a financial background enabling us to advise you on the most tax efficient pay outs. If a pay out is made below £30,000 then a properly drafted agreement can exempt the amount from tax. We have advised employees to avoid payments being made subject to tax by having the payouts labelled as severance pays and not PILONS.
Why us?
At Swindon solicitors we have in-depth knowledge of Compromise Agreement and Employment law. This means we have the skills to negotiate the best deal for you.
Swindon solicitors have the expertise to advise any business on Compromise Agreements. We have been advising our clients since the introduction of these agreements in 1993.
For more information please contact us now.