Archive for the 'Compromise Agreements' Category

Compromise agreements - relevant adviser

Published
by
Usefully Employed
on July 8, 2008
in Compromise Agreements
. 4 Comments

Compromise agreements, which are a vital tool in dispute resolution, come with some sensible safeguards. To be valid in compromising employment rights they must be in writing, set out the claims which are being compromised, and the employee must have received advice on the agreement’s terms and effect. The advice must come from (presently) a solicitor, barrister, Legal Executive, TU rep or advice centre worker. The advisor must be insured for the advice, and be independent from the employer. The proposal is to extend this to CIPD members, or in other words, qualified HR professionals. This is interesting, as one immediately wonders when this is likely to happen in practice. Some solicitors (for whom this can be profitable work they want to protect) have sneered that this could perhaps be a Saturday job. In truth, this suggested change is to be lauded and is ahead of its time. It’s no coincidence that CIPD have pushed for this change soon after MoJ regulation effectively endorses non-lawyer Claimant representatives in the tribunal.

The long-term future of most employment law provision to Claimants is not through firms of solicitors, but instead (as I’ve blogged before) through multi-disciplinary teams owned more likely than not by insurance / bank backed teams. In organisations like this, a CIPD practitioner will frequently be indistinguishable from any other qualified representative. It’s an unpalatable truth for some, but is certainly the way forward, as anyone who has worked for the Croner / First Assist / Peninsula / Mentor type company can attest.

The full consultation document is here. It also covers some tribunal changes which I’ll blog about shortly.

Compromise Agreements - subsequent discovery of misconduct

Published
by
Usefully Employed
on May 22, 2008
in Compromise Agreements, Solicitors and Unfair Dismissal
. 0 Comments

I remember Collidge -v- Freeport plc [2008] EWCA Civ 485 when it was at first instance, dealing as it does with the very common clause found in compromise agreements that:

“Subject to and conditional upon the terms set out below, [Freeport] will pay to you the sum of £445,680 gross as compensation in respect of the termination of your employment…

“You warrant as a strict condition of this agreement that as at the date hereof… there are no circumstances of which you are aware or of which you ought reasonably to be aware which would constitute a repudiatory breach on your part of your contract of employment which would entitle or have entitled the company to terminate your employment without notice”.

… in other words that subject to the warranty being true, we’ll pay you lots of money. The warranty was not true. Collidge had done bags of things which would have entitled Freeport to summarily dismiss him.

The judgment confirms that in this agreement, the warranty was a condition precedent. In other words, all performance by Freeport of its obligations under the agreement was subject to the warranty - rather than it simply having a remedy of damages for its breach. Compromise agreements are tricky - they have to be very tightly drafted according to the individual circumstances, but increasingly are simply run off as precedents. Given that the context in which the agreement was signed, Collidge may well have thought that he was protected from subsequent discoveries of impropriety, so this case emphasises both the quality draftmanship required on compromise agreements as well as the thoroughness with which the employee’s solicitors must advise.