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Are Compromise Agreements Good for Organisations?

Posted: Friday, 4 January 2019 @ 13:43

Acas has done a good response to the government consultation on resolving workplace disputes.

As Acas observe, anecdotal information suggests that the main attraction for both employers and employees appears to be the opportunity of a “clean break”.

Both parties can also often share an interest in avoiding the need to air the dispute in a public hearing.

Acas also correctly observe that if a parting of the ways appears inevitable, employees may welcome the chance of an agreed settlement being available immediately rather than enduring the cost, stress, delay and uncertainty of pursuing compensation through tribunal litigation.

The facility for a swift and dignified way of drawing the relationship to a close on confidential terms can be particularly appreciated by senior or long-serving employees, especially those in deteriorating health.

I agree with Acas that there is a risk that if organisations make routine use of compromise agreements in respect of virtually all terminations some managers could grow over-reliant on them as a “safety net”, and might be less inclined to embark on the difficult conversations necessary to address issues such as behaviour, performance or attendance at an early stage.

This may not serve the best interests of organisational effectiveness overall.

This shows that what organisations need is to to have the ability to have difficult conversations.

My experience is that if organisations are going through the point of a Compromise Agreement, the just want to get the employee out and there is too much emotion. The solution if feedback is desired is to get it from an independent party. 

Justin Patten