Compromise Agreements

My role is being made redundanct and I came to a compromise agreement with my company a little while ago. One of the conditions for agreeing to the CA was that I would be paid a 2009 performance amount ( if this was paid across the company) in my March salary. I am due to finish in April but did not receive the performance amount in March even though I have this stated in writing from my HR manager and all non-redundant staff received their amounts.

Can you confirm where I stand legally as the company is still not confirming when or how much I will receive here (it is apparently due to be signed off but there is no indication when). Am I able to contest this legally before I leave and before I get the CA which is due in the next week and which I am entitled to pass to my solicitor for verification.

Each agreement must be tailored to meet the facts and circumstances of the case. It is therefore impossible to adopt a one size fits all approach to drafting of a compromise agreement.The advantage for the employer is that they are able to draw a line under an employee's departure and feel protected from future claims. The advantage for the employee is the financial sum received in return.

In answer to your question steve, if the compromise agreement is not yet signed, then you can't challenge on the terms of it, as it is not yet in force. However if one of the conditions you set for agreeing to leave on a compromise agreement was this bonus, then obviously you can refuse to sign the agreement.

Just to clarify I have signed an agreement to compromise in February and am due to get copies of this a few weeks before I leave to be verfied by my solicitor. The bonus was not mentioned in this letter as it was expected to have been paid before I left and therefore no relevant in the CA , though it was a condition in me signing the CA back in Feb.

If you've already signed the CA that makes things more difficult. If you signing the CA was conditional on you receiving the bonus, your solicitor should have made sure that was included in the agreement and really shouldn't have let you sign it without that.

However you've signed it now, so you are reliant on anything you have in writing saying you will receive the bonus, either in terms of your employment contract or other letter. What do you have?

I have an email from HR stating I would receive it in a pay roll which has passed though I have been told they will amend the CA to include this (though it won't state when payment will be made or how much I will receive which I am unhappy about)

In terms of the CA I am not sure what I have signed as it has not been verified by a solicitor yet, I think it is an agreement to compromise rather than the CA itself (if that makes sense) which I am due to get at the end of the month.

They won't be able to hold you to anything you signed in terms of a compromise agreement without getting it checked first, so the terms and conditions of the agreement are still negotiable. When you get the agreement and take it to your solicitor, make sure he/she insists that actual amounts to be paid are specified.

Each agreement must be tailored to meet the facts and circumstances of the case. It is therefore impossible to adopt a one size fits all approach to drafting of a compromise agreement.


compromise agreement tax