Settlement Agreements and Compromise Agreements.

Is there any difference?

Compromise Agreements recently became known as Settlement Agreements. Although the name of the Agreements has changed, the structure of them has not. A Settlement Agreement still has to be in writing, has to relate to a particular complaint or proceedings, has to identify the person who advised the employee about the terms and effects of the Agreement, has to confirm that the person who advised has insurance cover in place and has to state that the statutory conditions regulating the Agreement have been complied with. However, there is now an ACAS Code on Settlement Agreements in place which sets out how parties should interact with each other during the Settlement Agreement process which includes allowing an employee to be accompanied to any settlement discussions; the Code also states that the parties should be given a reasonable period of time to consider the proposed Settlement Agreement. While the Code (which is 11 pages long) is not binding, it would be extremely prudent to follow the good employment practice set out in it when dealing with Settlement Agreements because if you do not and the matter ends up before a Tribunal, you will be penalised for having failed to do so.

If you require any employment advice or representation, whether you are an employer or employee, feel free to contact Alan Davidson for a consultation: 01756 692 869.




Alan Davidson
Partner, Employment Law