If you are a manager of a company or business then it is not unlikely that you have had to make a number of your staff redundant in recent months. The harsh global recession has left many businesses struggling, and managers of businesses in all industries have had to make staff cuts. This is never an easy thing to do and it can often cause problems, especially when employees choose to take you to a tribunal in the face of their job termination, claiming that their dismissal was unfair. However, there are steps you can take to combat this risk and these are referred to as Compromise Agreements.

What Are Compromise Agreements?

Compromise agreements are legally binding agreements which often follow a member of staff's employment termination. This termination can be through redundancy or for another reason such as poor conduct. They usually include a severance payment offered by the employer, and in return the member of staff will agree not to go ahead with any claim they might have to go to an employment tribunal to seek confirmation that their dismissal was indeed unfair.

Are Compromise Agreements Really Necessary?

If a member of staff feels that their employment has been terminated unfairly then he or she has every right to take the case to a tribunal. As a manager, you may feel that this was certainly not the case, but if the employee were to win, this could result in you having to pay compensation or even being forced to reinstate him or her. The only way that you can ensure that an employee will not complain to a tribunal after his or her redundancy is to persuade them to sign a compromise agreement - which essentially means they have given away their right to do so.

There is no obligation for the employee to sign the agreement if they are not satisfied with it and if they refuse to sign the document then they are still free to go to an employment tribunal and seek a hefty amount of compensation or even reinstatement in their position.

If they do refuse to sign then you are perfectly within your rights to refuse to pay the employee the full enhanced redundancy package that she or she may have been entitled to and can simply offer the minimum state entitlement in the face of their redundancy. The employee may well make an attempt to negotiate the agreement, asking for a higher severance pay-out. They may also go through with a tribunal claim to put pressure on you to agree to a high figure. Of course, this is completely up to you in terms of a figure that are prepared to pay, but legal support is available to you to advise you on the best moves to make. Professional legal support is seriously advisable in the face of compromise agreements which can often get very messy indeed and there are many firms with the relevant experience that can provide you with the necessary know-how in dealing with these.