Compromise agreement

A compromise agreement is a written agreement between employer and employee. Compromise agreements are often entered into when termination of an employment contract occurs, such as in a redundancy situation.

The main aim of a compromise agreement is to prevent an employee from bringing legal claims against the employer relating to employment and/or its termination. Usually the employer will agree to pay a sum of money in return for giving up these rights, which is usually an enhancement on the statutory entitlement.