Midlands employers who use "off the peg" compromise agreements when getting shot of staff are heading for trouble, James Tait, an associate at Birmingham law firm Shakespeares, has warned.
It follows a landmark decision last week when the Court of Appeal ruled that it is not acceptable for such agreements to be drawn up using general catch all phraseology without specifically listing the claims to be waived on termination of employment.
Compromise agreements are a common tool used by employers to protect themselves from unwanted litigation when they part company with an employee. The employee agrees to accept a payment in exchange for waiving usually a lengthy and comprehensive list of claims against the employer.
Now, said Mr Tait, careful thought needs to be given to which claims an employee might bring. It is important that all claims to be waived are listed and that the agreement clearly sets out what has been agreed between the parties so that neither is misled.
The case in question involved Birmingham-born Dr David Hinton and his former employer the University of East London. The University employed Dr Hinton in its Cultural Studies Department from January 1, 1995 until July 31, 2003 when he took voluntary retirement and returned to Birmingham.
Whistle-blowing complaints he had raised had cost him dear, and the affair ended up at an Employment Tribunal which he won only for it to be overturned at an Employment Appeal Tribunal. However, the Court of Appeal has now ruled in his favour.
The University in London had adapted a "template" compromise agreement but had not specifically list Dr Hinton's grievances.
Mr Tait who acts for Dr Hinton said: "This has been a complex case which reflects the fact that employment law is becoming an even more difficult area and trying to short cut the system could give you a nasty shock. Using this style of agreement and not adapting it properly to each specific case will render the entire exercise useless.
"Employers should ensure that all claims are specifically particularised in order to maximise the chances of the agreement having the desired effect so both parties can go their separate ways without unwarranted legal repercussions."