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Reaching a compromise

9 November 2010

Compromise agreements have been used to resolve employment disputes for years, so what’s all the fuss about now?

On a literal interpretation of S147(5)(d) of the Equality Act a solicitor acting for an employee in relation to the compromise agreement is precluded from signing it off as they are not an ‘independent legal advisor’ for the purposes of the act.
This would seem absurd and the Government’s Equalities Office (GEO) has said the situation remains unchanged. However, the Law Society disagrees and has requested an urgent meeting with the GEO to resolve the issue.

In the meantime there seems to be two options for employers: continue as before and hope that tribunals take a purposive approach to find that the compromise agreement is binding or engage an ACAS conciliator and use a COT3 as opposed to a compromise agreement.

Clearly the amount of money at stake and the risk of a successful employment tribunal claim should be taken into consideration when weighing up the options.

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