A compromise agreement is a specific legal document which enables an employer to pay an employee an ex-gratia payment tax-free up to £30,000.  In exchange, by signing the agreement, the employee waives their right to bring (or continue to pursue) any proceedings in an Employment Tribunal against the employer.  These types of agreements are used in many different situations and can be useful mechanisms when negotiating the exit of an employee and ensuring protection for the business.

We can draft a compromise agreement which complies with the relevant legislation and also contains key protection for the business including around confidentiality, tax indemnity and restrictive covenants.  Your employee would be required to seek independent legal advice on the terms and effect of entering into the compromise agreement.  We can either support you with any queries received from the employee, or deal directly with their independent legal adviser to ensure a smooth completion.