Compromise Agreement .. Is this right???

[surprised]

Hi all .. I hope someone can help with this as there is nothing on the net about this type of compomise agreement..

I have today received a compromise agreement from my employer .. The strange thing about it is that in section 1 (Background) it reads:-

 

1.1 .. This agreement has been entered into on a totally volumtary basis by the executive (me) who personally requested that he be allowed to leave the employ of the company.

 

1.2 .. This agreement records the terms and contions upon which the company and the executive have agreed to settle all outstanding claims that the executive may have against the company resulting from his employment or its termination.

 

Now.. The sticking point for me is that the boss called me into a meeting where he asked me to sign this without seeking legal advice, telling me it would be more benifical to me to give me the £400 it would cost the company to pay a my solicitor to look it over.

 

I have been with the company for 2 years and he has offered me 1 months notice and 3 weeks wages (I am 44 and would be entitled to 3 weeksredundancy)

 

My department within the company has 2 employees (My manager and I) we net the largest income within the company and my manager cannot do the job alone as he already puts in 60 hrs a week so he would need to either employ someone new or move someone from another department to help my manager.

 

His reason for picking me to leave is that the company needs to make cuts and because my wage is reasonably low and my length of service is only 2 years it would cost the company less to get rid of me than somone that has been there 20 years and on a high wage ... even though they have just taken on 3 new employees within the last 3 months .. One of them being a school leaver.

 

I have never had any diciplinary issues and always helped out other departments when needed ..

 

The company is reasonably small with about 50 employees and in the manufactruring sector.

 

If anyone can point me in the right direction to go as he has requested this form back beginning of next week as my termination date is on Friday.

 

Many thanks

[Emmzzi]

is he actually making you redundant and do you think the process for selecting you is fair? i.e. the work is going? If not then you can appeal the redundancy. Signing the CA would mean you could not go to ET.

 

I would never, ever ever ever ever ever EVER sign a CA without seeing a solicitor.

 

Ever.

 

No, not ever.

[surprised]

he told me his reason for selecting me was that because my wage is one of the lowest in the company and my service is only 2 years it would cost the company less in redundancy than an employee that has been with the company for several years and on a much higher salery

 

My position is not being made redundant because there is too much work for just my manager to do .. he already puts in more than 60 hrs a week and he needs somone with him to do the work he doesnt have time to do ... so im guessing my boss will move a higher paid employee that that isnt as busy to help my manager.

[Emmzzi]

well if the work is distributed among other people it isn;t unfair. if it all goes to one person and tat is their only job then it is.

 

government guide here

 

http://www.direct.gov.uk/en/Employment/RedundancyAndLeavingYourJob/index.htm

 

See that solicitor though.

[surprised]

ok .. so this brings me to my next question ..If I sign this CA it is reading as though I have requested to leave my job voluntarilly which I didn't (see 1.1 above) .. would I still be able to claim JSA straight away? and my mortgage has redundancy cover and wont cover me for leaving my job

Edited September 8, 2012 by surprised

[Emmzzi]

Yeah, it does sound like you asked to go and the job is still there.

 

This is why you need a solicitor.

[surprised]

the problem with getting a solicitor is he will reduce my severance by £400 if I do .. and money is going to be tight enough as it is without my wage coming in .. I have a mortgage and 3 kids living with me so would loosing this £400 in my severance be worth getting one as that will at least put food on the table for a couple of weeks .. will having a solicitor get me a better deal than getting the money up front? I dont think I want to stay there now because my boss will make my life there a misery if he has to change his decision and keep me on

[dx100uk]

um...

 

i dont think they can do that.

 

they must pay for your sol.

 

dx

[surprised]

I know they have to pay for my solicitor but he has offered me the £400 he would have to pay my solicitor if I dont get one

[dx100uk]

he/you should not be doing that

 

i think you'll find that [legally] invalidates the whole process

 

dx

[Emmzzi]

what dx said.

 

don't be daft, get a solicitor!

[surprised]

I know .. What im trying to say is ..

 

My boss wants to add £400 to my severance payout if I dont get a solicitor ... instead of paying that £400 to a solicitor

 

His argument is that he has done several CA's and had lots of solicitors look at the standard company CA so rather than lining the pocket of a solicitor that will just say "yeah thats ok" and sign it off ... He wants to give me that money in with my leaving package

[Emmzzi]

I am not thick and I understand that completely.

 

Whose interests is boss looking after? Yours or his?

 

If he cared sooooo much would he not just give you an extra £400 AND the solicitor?

 

Regardless - you HAVE to see a solicitor!

 

http://www.compromiseagreements.co.uk/legaladvice.htm

 

Now don't let us see you back here in two months having been stitched up and wishing you had seen a lawyer!

[surprised]

Emmzzi & Dx .. I fully appreciate what you are telling me and I am taking it on board but my problem is right now that the extra £400 in my leaving package will put food in my kids tummies for a couple of weeks so would be my better option than if a solicitor just signs it saying that everything in order and he cant get me a better package than I have been offered (the basic redundancy gov guidelines I would get if i was made redundant) to just sign saying i have requested to leave the company

[surprised]

Emmzzi .. Point taken ... I wasnt infering you were thick ... This has come as a bit of a shock to me and out of the blue so was just trying to make sence of it all .. sorry if I offended .. It wasnt meant in that way

[Emmzzi]

so it's better to let him write what he wants, potentially blow your redundancy insurance, not get references tied up, etc etc?

 

Ok. You're an adult. But it is clear from the link I posted it will NOT be a legally binding agreement.

 

Also ask yourself - if he isn't worried about anything why is he asking you to sign a CA instead of just laying you off? There is no REQUIREMENT for a CA for redundancy. Just tell him to make you redundant the normal way, with no CA.

 

That's the legal position. You have to make your own choice. I don't think I am going to agree with it.

[altobelli]

Hi

 

The important thing is that if you sign something, it reflects the fact that this is a redundancy situation. What you have been offered doesn't appear to reflect that and seems irregular.

 

Perhaps you could speak to CAB or a local law centre if you have one:

 

http://www.lawcentres.org.uk/lawcentres/

 

They may be able to give you some advice for free from one of their solicitors. You could take what you have been offered and show that to them. Also speak to your employer and express the concern that the CA you're being asked to sign doesn't mention redundancy. He says he has done CAs before, maybe ask if he has a template of one which specifically covers a redundancy situation he can use that instead of what you've been given.

 

Here's an example template of a compromise agreement:

 

http://compromise-agreement-examples.contractaccelerator.co.uk/ExampleTemplate.html

 

I think your employer may well be trying to do you a favour - he knows you're going to be out of a job and maybe feels that you're as well having the £400 he would otherwise have to spend on a solicitor. But before you sign anything make sure that everything is proper. See if he'll be amenable to you completing a compromise agreement such as the template above (with appropriate specialist advice), which may still save him the solicitor's fees.

 

As far as I know, its a legal requirement that you take professional advice before signing a compromise agreement and that the person giving you the advice signs the agreement.

[becky2585]

I deal with compromise agreements on a daily basis.

 

In order to make it legally binding, you need to take independent legal advice from a qualified lawyer. Because of this requirement, an employer will usually pay a contribution towards legal fees, usually of a minimum of £250 plus VAT.

 

That said, certain levels of certified trade union official are permitted to give the advice - providing they do it for free.

 

Because by signing the agreement you're waiving your right to bring any claims against your employer, usually there's a "sweetener" attached - ie more than the statutory minimum entitlement, which you'd be entitled to whether you sign the agreement or not.

 

If your employer had bypassed following any dismissal procedure, they could be liable for unfair dismissal if you didn't sign the agreement. This means that financial compensation should be reflected in the agreement.

 

If you sign up to the agreement with it stating you left in the circumstances you did, you won't be entitled to claim on your mortgage protection insurance. I always insist on "redundancy" being the reason for termination, as "mutual consent" or "resignation" or anything along those lines means no entitlement to JSA or mortgage protection.

 

You can't sign the agreement without taking legal advice as it wouldn't be valid and enforceable.

 

I would suggest seeing a solicitor and getting them to outline your employers legal liability and trying to get an increase to the money on offer - otherwise, if your employment is terminated on Friday, that could be an unfair dismissal, and as compromise agreement negotiations can't be referred to in a tribunal, they may nt have much of a defence!!

[surprised]

Thanks Becky,

If I dont sign and he re evaluates his decision because I dont and keeps me employed .. Is there anything stopping him making my life a living hell? .. I enjoy my job and this sort of came out the blue as I make the company more bottom line profit than nearly every other employee (£9.00 pure profit for every £1 wages)

This would even include him if wages, car, entertaining, travel, etc.....

 

Can he just claim some unjustified misconduct reason for getting rid of me like theft that would come down to my word against his in an ET

[becky2585]

Thanks Becky,

If I dont sign and he re evaluates his decision because I dont and keeps me employed .. Is there anything stopping him making my life a living hell? .. I enjoy my job and this sort of came out the blue as I make the company more bottom line profit than nearly every other employee (£9.00 pure profit for every £1 wages)

This would even include him if wages, car, entertaining, travel, etc.....

 

Can he just claim some unjustified misconduct reason for getting rid of me like theft that would come down to my word against his in an ET

 

Well, the test for a fair dismissal is whether 1) there is a potentially fair reason, 2) whether the employer had a genuine belief in your guilt, 3) whether the employer conducted enough investigation to have a belief in that guilt, and 4) whether dismissal is reasonable in the circumstances.

 

If he can't show all of the above, the dismissal would be unfair.

[surprised]

ok ... Thanks Beky,

I think monday I will inform him I cant sign it without consulting a solicitor because legally I have to take advice on it and then find someone to take it on .. Im guessing the solicitor that does will have to be quite strong because my boss is not good at man management or reasoning and is quite firey (one day your his best mate the next your walking on egg shells) Next week will be an egg shell week I think!!!

[Emmzzi]

for £400 the solicitor will read it and explain it to you. He'll need more money to negotiate on your behalf. Just to set the expectations, you will probably need to be strong yourself.

[surprised]

Thanks Emmzzi,

Would I have to pay for him to do the negotiations or is that cost down to my employer too??

[Emmzzi]

The cost of that is down to you. I suggest going through it and what it means with the solicitior; and working with your employer yourself on redrafting the agreement.

[surprised]

ok .. I will see what he has to say on monday ... I know he wants to change some of the wording if its for the solicitor .. My guess is changing it from looking as though its me requesting to leave to voluntary redundancy ... it seems to me he wanted it to look like i had requested to leave so he could fill my position with someone else (someone mentioned before redundancy is the position not the employee)