What are the possible pitfalls and/or negotiating points on compromise agreements ?
These include :- • It may be possible for part of the payments to be paid in a more tax efficient manner. The first £30,000 can possibly be paid without deductions as long as it is not paid as part of a contractual benefit. • The offer may look good, but when you take into account the sums the employer has to pay you anyway (including statutory redundancy payments, holiday and notice) it may be rather less generous than you initially suppose. • The agreement may for example ask you to sign away valuable benefits such as bonus, car, medical insurance, commission or the right to exercise share options • It’s often advisable to get a suitable reference expressly agreed and attached to a compromise agreement.. The agreement may impose restrictions on what work you can take up after you leave. Alternatively the post termination restrictions in your employment contract may remain enforceable.
