Are compromise agreements legal?
Compromise agreements, also known as settlement agreements, are legally binding agreements between an employer and employee that settle any disputes or claims between them. They are often offered in situations where an employer is making redundancies or an employee is leaving the company, and they may include compensation payments, references, and confidentiality clauses.
So, are compromise agreements legal? Yes, they are legal and enforceable if they meet certain requirements.
Firstly, they must be in writing and must clearly state that they are a compromise agreement and that the employee is waiving their right to bring any claims against the employer. The agreement must also specify the claims that are being settled, and the compensation or other benefits that the employee is receiving in exchange for signing it.
Secondly, the employee must have received independent legal advice before signing the agreement. This is to ensure that they understand the terms of the agreement and the implications of signing it, and that they are not being coerced or pressured into signing it.
It is important to note that some types of claim cannot be waived by a compromise agreement, such as claims for personal injury or claims for certain statutory rights. Any attempt to include these types of claims in a compromise agreement will be void.
Overall, compromise agreements can be a useful tool for employers and employees to resolve disputes and conflicts. However, both parties must ensure that the agreement meets all legal requirements and that the employee receives independent legal advice before signing it. If these conditions are not met, the agreement may not be legally binding.
