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Annie Hayes



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HR Tip: Dismissal settlements


These questions are being answered by Learn HR, a market leader in the provision of HR and payroll training and nationally-recognised professional qualifications.

Q: “We wish to dismiss an employee but do not want to go through a lengthy process. Neither does he. He will accept a sum of money that we have agreed. How can we make sure that he will not change his mind and take us to court?”

A: There are two ways in law. ACAS would come along to ratify the arrangement on a form COT3 if they carried out conciliation and brought the two parties to agreement. They are unlikely to do so however since you have already agreed a sum. The only other way is to arrange a compromise agreement. This must be drawn up in writing by an independent lawyer, certified trade union official or advice centre worker who is insured for the purpose and who confirms in writing that the employee has been made aware of his rights in the specified matter. You could however consider holding back part of the settlement until four months after the person's employment ended and pay it if in the meantime he has not instituted legal proceedings against you.

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One Response

  1. Who can draft a compromise agreement?
    While not wishing to be accused of being pedantic, it is not the case that a compromise agreement has to be drawn up by an independant lawyer. Anyone can do so (although they should know what they are doing!), the key point is though that an employee cannnot sign it on their own and it remain valid. The employee has to get it countersigned by alawyer, TU offical etc.

    I’ve done many in my days, am not a lawyer, and they’ve never been challenged!

    Quentin Colborn

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Annie Hayes


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