compromise agreements (redundancy)
 

Hi
Anybody got any knowledge on compromise agreements, I have been sent home facing redundacy, worked for firm 18 months. They have sent me a compromise agreement which offers me 3 months money (my 3 months notice period) which would be taxable. Meanwhile I sign away all my rights.

What is the word, I know see a solicitor, but whats the real word.

Cheers

Mark

Did you discuss this with your (former) employers in a 'without prejudice' meeting? It seems strange to just send you it out of the blue...

Essentially the can make you redundant by following a prescribed course of consultation with everyone who is employed to perform the duties of the role that is being made redundant. Once it is agreed who should be made redundant there is then a minimum statutory redundancy payment (which is not a lot). The reasons for wanting someone to sign a compromise agreement can be nefariou - like they want you out and are not actually making your job redundant at all. If they make you 'redundant' then employ someone else to do your job then you can take them to the cleaners.

I know about this stuff from the other side. I had to make someone redundant (genuinely) but the complication was that he was a shareholding director of the company so we settled the matter in 'without prejudice' meetings (which means neither party can use it in court) and drew up a compromise agreement to the satisfaction of both sides. Loosing a founding member of the company can be like a messy divorce and the agreement kept it clean.

Like you said: Go see a solicitor - preferably one who specialises in employment law.

Good luck!

Check this site out for info.
http://www.dti.gov.uk/

[Edited on 12-2-2006 by final_edition]

[Edited on 12-2-2006 by final_edition]

I have no advice to give through knowledge but, good luck dude. You have my sympathy - I've been in the same situation myself on two occasions.

Mark

Sorry to hear about this.

Very good advice from Rally

The first rule is to act fast and DON'T sign anything until you have sought professional advice.

Is there anyone else being made redundant in the business, or in your department?

Do you have a contract of employment? It is a legal requirement that you have one. If you don't have one, then ask for one immediately.

Do you have a copy of the companies policy on redundancy / grievance procedures etc. If you do see a solicitor he will also want to see the above.

As you have worked for the company for more than 12 months you are entitled to redundancy pay. This is normally one weeks pay for every year of employment. This would be in addition to any pay in lieu of notice and outstanding holiday pay.

As Rally says in his post there has to be consultation with any affected parties to this which should be done over a reasonable period of time. i.e. 4-6 weeks or more if possible.

Have you been told recently or had a general meeting or letters informing you that the company is in trouble?

Do they operate a last in first out policy?

I am like rally in that I'm also in management and have had to make people redundant, but I always make sure that the person involved gets every thing he is entitled to. It's traumatic enough without being 'stitched up' by the company.

You would be amazed at how many companies leave themselves open to unfair dismissal claims because they don't follow the rules.

If you want to u2u me your address I can quickly send you a copy of the procedures which your company should be following and which will also detail your entitlements. The procedural information was given to me by our legal advisors and is very comprehensive ( Even I understand it ). You could also look on the ACAS website.

Also don't forget that if they do ask for a meeting with you ( for which you must have advance notice - not ''come in this afternoon '' ) then you are legally entitled to have someone with you. There is nothing worse than being outnumbered . I know, I've been there.

Don't forget that u2u mark if you think it will help

Best of luck

Phil

Mark - I cant add much more to this.

We have been doing this last year with key personnel, and now we are just waiting for the windup order for the rest of the staff in our company due to being sold out to a major player, with completion going through by mid March.

Lifes bugger innit? Chin up mate

C:)

the deal being offered although not the best scenario ever obviously does look and sound like a good deal mate.

3 months pay after an 18 month contract isn't bad at all. Confused why your are to be taxed on it though, i was under the impression all redundancy pay was tax free.

I'm still praying for it at my place :)

So good info on business link site
http://www.businesslink.gov.uk/bdotg...mId=1075081896

Also do a search on google for compromise agreement you should find quite a bit of info
Best of luck

hopefully seeing a solicitor tomorrow
will let you know


Mark

Redundancy is tax free upto £30k