Employers failure to fulfil Compromise Agreement led to Employment Tribunal Claim
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Issued 11th January 2010
A Compromise Agreement generally offers an employee compensation in return
for not making an employment tribunal claim against the employer. Once a
compromise agreement is signed, an employee cannot then bring an employment
tribunal claim against the employer providing the compromise agreement satisfies
provisions in the Employment Rights Act 1996. However, if the employer does not
fulfil their side of the compromise agreement, then the employee may bring a
claim.
In Vincent v Horizon Recruitment Ltd, the employee agreed to resign in return
for a financial settlement set out in a Compromise Agreement. However, the
employee subsequently submitted an employment tribunal claim against her former
employer for misrepresentation in inducing her to sign a Compromise Agreement in
return for a financial settlement, which the former employer had failed to make.
The Employment Tribunal found that the Compromise Agreement was valid and the
employee had signed the Compromise Agreement after being induced and/or reliant
on a material misrepresentation on the part of the former employer. The employer
appealed. The Employment Appeal Tribunal found that employers and employees are
permitted to make valid Compromise Agreements and the Employment Tribunal has to
ensure that any Compromise Agreement is valid and so was correct in making a
finding of misrepresentation. The appeal was dismissed.
This means that employers should take care to comply with the terms of
Compromise Agreements as failure to do so may result in an Employment Tribunal
claim rather than just enforcement proceedings.
Employees considering making an Employment Tribunal claim if an employer
fails to comply with a Compromise Agreement should be aware that time limits
apply to such claims which will be rejected if they do not meet the deadlines.
If you have been asked to sign or draft a Compromise Agreement, please
contact Ashley Hunt or Carrie-Ann Randall now on 0116 212 1000. Lawson-West’s
employment law experts can assist in both drafting and negotiating terms in a
Compromise Agreement.
Lawson-West specialise in commercial, business and employment law. Our team
of dedicated commercial solicitors can help with buying or selling a business,
business law and disputes, landlord and tenant issues and commercial property.
Our expert employment team can offer practical advice and guidance on all
aspects of employment law including redundancy, compromise agreements and
dismissal procedures. Visit
www.lawson-west.co.uk for more information.
