When would I need to consider a compromise agreement?

A compromise agreement is usually considered when a person is unfairly dismissed from their job. If the person wants to take legal action, e.g. they want to take their employer to court over the unfair dismissal and sue them, a compromise agreement is offered as a kind of peace bargain. The employer offers a sum of money in return for the silence of the employee. If the employee agrees to the terms of the compromise agreement and accepts the cash then they have to abide by a series of terms. These can be anything but a good example would be, if the employee signs the compromise agreement then they cannot take any further legal action against their employer.

Of course you do not have to be an ex-employee to consider a compromise agreement. These can also be taken out whilst you are still working for the company. For example if you want to take legal action against your employer but still carry on working for them you can keeps things more civil by asking for a compromise agreement. For example, if you have an accident at work and need to pay medical fees, instead of suing your employer, ask for a compromise agreement. You won’t sue them, if they pay out.  And that way you’ll be the money and be able to pay your medical fees and the company won’t get their name dragged through the mud.