Compromised Compromises
It’s easy to think that a compromise agreement is valid if both parties agree to its contents and sign on the dotted line.
In truth, your out-going employee must be given independent legal advice (which you must pay for) on the construction of the agreement. It is not necessary for the advice to relate to any potential claims because, after all, the whole point is that these claims are being waived.
In the case of McWilliam and others v Glasgow City Council a number of former employees presented subsequent unequal pay claims and based their case on their belief that the independent solicitors failed to do more than discuss the terms and effects of the compromise agreements. The claimants lost their case of course, but the caution for all employers is that if employees do not fully understand the limits of their counsel entitlement then you may find yourself wasting time and money defending a claim like this.
We recommend that you not only ensure that you always provide independent counsel to the other party in your compromise situation but that you also make it clear to this party that the advice they will receive relates to the legality of the agreement and not to any disgruntlement they may have with regards to their employment.
Case ref: ET S/132316/07
