Lawyers Coventry

Coventry Compromise Agreement FAQs

Do I have to sign the agreement ?

No, you do not have to sign the agreement and cannot legally sign it until you have seen a solicitor, trade union official or advice centre worker for legal advice.

How much will my legal costs be ?

In 90% of cases, employers will agree to contribute £200-£500 for your legal costs.

Will I have to work out my notice period if I sign the agreement ?

In the vast majority of cases, you will not have to work out your notice period and payment in-lieu of notice will be given.

What’s the position on taxes in compromise agreements ?

In most instances, payments up to £30,000 are tax free where that sum of money has been used to settle any legal claims that the employee may have.

In exceptional cases, Inland Revenue will employees for income tax   where “it may appear that the sum paid under the agreement is excessive in the context of the claims being settled. Where that is the case it may be that part of it should be attributed to the undertaking not to pursue claims, even though there is no specific attribution in the agreement”.

Can I start working after signing the agreement ?

In the vast majority of cases, the employee is entitled to seek work after signing the agreement and will be paid in-lieu of notice.

Can I just ask my employer for a compromise agreement ?

It is not common.  However, it is possible.  You should think carefully before approaching your employer and it is of course advisable to seek professional legal advice.  If you do ask for a compromise agreement, you should remember that will effectively end the employment relationship between you and the employer as asking for the agreement will be taken to mean you want to leave.  Your employer may not have actually decided to dismiss you yet, so it is important you take this into account.

If I sign the agreement, will I waive my right to pursue all kinds of legal claims against my employer ?

Generally, you will waive your legal right to pursue most types of legal claim.  However, you will still be allowed to pursue personal injury claims or claims for diseases contracted as a result of working for your former employer.

Can I tell my friends and family about the agreement ?

It depends on whether you have been asked to sign a confidentiality agreement.  If you have you may be restricted from telling anyone (bar family, perhaps) about the very existence of the agreement.  Alternatively, you may agree to not tell anyone about the contents of the agreement.