Why do I need an employment solicitor?
At London Compromise Agreements, we consider there are two reasons to use an employment solicitor:-
- Use the correct procedure
- Have a correctly drafted agreement
Whatever your reason for offering a compromise agreement it is vital to follow the correct procedure to avoid any potential employment claims. This will then increase the likelihood of the employee being agreeable to signing the compromise agreement.
When employment solicitors act for employers, the strategy is a damage limitation exercise - avoiding or settling litigation in the most cost effective manner and bringing the contract of employment to an end. There are many obstacles in the process - if you get them wrong the employee may be able to claim unfair or constructive dismissal, leaving you having to pay out a substantial amount of money.
Compromise agreements contain the terms and conditions which govern the end of an employment relationship as well as compromising potential employment disputes. As such they touch on and incorporate many aspects of employment law. Consideration needs to be given as to whether to increase the post-employment restrictive covenants in order to safe guard your business. Is there a risk that the ex-employee will open up in competition? If so then it would be advisable to ensure that there are restrictive covenants in the compromise agreement preventing this, at least for a certain time frame.
Attention also needs to be given to the value of the financial package: is it enough to compensate the employee for compromising potential claims? In addition, consideration needs to be given to the Inland Revenue policy on remuneration for restrictive covenants; the amount offered cannot therefore appear excessive.
It therefore pays to instruct a solicitor to advise on the procedure, the potential claim and draft the compromise agreement. Remember, for a compromise agreement to be binding the employee must have the compromise agreement signed off by an independent advisor, so if the agreement is poorly drafted or the sum offered inadequate it is likely that the employment dispute will become more contentious leading to escalating costs.
Whether the scenario is a simple redundancy or matters have become more complex it is beneficial to seek the advice of an employment solicitor who can advise on the procedure, the potential claim, provide a risk and cost assessment and draft the compromise agreement.
There are employment advisory services which offer compromise agreement services, however, recent case law suggests that only the advice from a solicitor is legally privileged. The last thing you would want to have is your confidential conversations with your advisory service being used in the employment tribunal against you.
Employment law is a specialised area of the law and as such there are many issues to consider. If you wish to have a better knowledge of the issues please visit http://www.employmentlaw.co.uk/ for a comprehensive overview. For more detailed advice please call Andre Pungerl or Ruth Neil both specialist employment partners at Stone Joseph on 0207 8549098.