What Is A Compromise Agreement?

2007-03-08 10:33:40

( Health )



A compromise agreement is used in companies where a redundancy or dismissal of an employee takes place. A compromise agreement normally contains a financial offer that will prevent an employee from suing the company for any matter in the future.

A compromise agreement saves an employee time and money. This is because there is no need to wait for months or even years to find a resolution to your employment case. This gets rid of any stress that you may encounter while waiting for the verdict of your case.

Although an employment lawyer is sought in any compromise agreement, lawyer’s fees tend to be lower.

A compromise agreement is only considered valid if the agreement is made in writing, and outlines the specific complaint of the employer. In addition, the employee must seek private legal advice from a lawyer regarding the terms and conditions of the agreement. The adviser’s name must be stated, and an indemnity coverage must be provided in the agreement for validity to take place.

Once a compromise agreement is signed, the employer can only take legal action against an employer for pension rights and personal injury.

Signing a compromise agreement gives you the benefit of a higher settlement package as compared to being dismissed from your job. Aside from this, a certain amount of the compensation received from a compromise agreement is provided tax free. Signing a compromise agreement does not mean a bad work reference. A good employment reference can be negotiated as part of the agreement.

A compromise agreement differs from a prenuptial or post nuptial agreements. Nuptial agreements are related to a contract that is signed between spouses prior or after a marriage. It outlines the division of properties and other assets should the couple divorce in the future.

A compromise agreement is also different from a software license agreement. Software license agreements are contracts between a software manufacturer and the user of the software. The software license agreement outlines the rights that an end user is given to use a particular software program.


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