Redundancy Compromise Agreement – Handling Multiple Sign-Offs

With many employers having to make multiple employees redundant, demand for independent legal advisers to sign off large numbers of Compromise Agreements is increasing. It is in the employer’s, employee’s and trade union’s interest to simplify the process and ensure all employees have access to expert employment law advice in the easiest way possible. This is particularly so where there are time constraints. So how can this be done?

Compromise Agreement employment law

A Compromise Agreements is a legally binding agreement between an employer and an employee. It is usual for a Compromise Agreement to be entered into shortly before or after termination of an employee’s contract. This allows a clean break where the employee waives their right to make a claim in return for an agreed sum of compensation.

It is a legal requirement that an employee receives independent legal advice before entering into a Compromise Agreement. The employer usually pays a fixed sum towards the cost of this legal advice.

The benefits of a streamlined process

If you are an employer making multiple redundancies, or you are a trade union representing a number of people being made redundant, the Compromise Agreement sign-off process can be time consuming and complex. The more law firms involved, the more cumbersome it can be. Where multiple redundancies are being made, it is often more efficient for one specialist employment law firm to advise all employees. This ensures consistency and reduces the time needed to complete the process.

Employers and trade unions can choose a law firm that offers a bulk Compromise Agreement sign-off service. However, where a single firm is nominated by the union or employer, every employee retains their right to choose their own employment law solicitor if they so wish. And the employer or trade union must ensure they advise employees of their right to instruct an alternative employment solicitor.

The benefits of a streamlined sign-off process are the same for all parties. A well-organised sign-off process from an experienced employment law solicitor will ensure every employee receives correct legal advice on their agreement’s terms and compensation. They can then make an informed decision as to whether or not to accept within the deadline set by the employer. Where deadlines are missed – and sometimes deadlines applied by employers can be tight – employees risk losing any offer of ex-gratia compensation over and above the statutory and contractual minimum.

For employers, the greater volume of cases can give them the chance to reduce the contribution they pay towards each employee’s legal expenses.

Compromise Agreement legal advice – what to remember

If you are an employer or trade union and you choose to instruct one law firm to act for your employees, this firm will negotiate with your legal team or solicitors if they encounter any problems with the Compromise Agreements. To make the process as straightforward as possible, it is important to instruct your own specialist employment law solicitors to draft the Compromise Agreements and advise on your proposed enhanced settlement terms.

It is also critical you remember to advise employees they can choose their own solicitor or properly qualified legal adviser and do not need to use your nominated firm providing the on-site service.