The below checklist is something that we often use when instructed to draft a compromise agreement. We will always include the essential terms such as payment of the compensation, sign off by Manx Industrial Relations and, of course, the waiver and release of claims. However, there are a number of additional terms typically included, or which may be advisable, depending on the circumstances.
For maximum efficiency, you can fill in this form before asking us to review or draft a compromise agreement. You can also ask us to advise on negotiating strategy and how to deal with any specific challenges the the employee may make/address any unique or complex factors that may arise in the particular case.
| Checklist – Compromise Agreement | Response |
| Preliminaries | |
| Correct full name of employer | |
| Reason for termination – ie mutual agreement, redundancy, some other reason | |
| Date of commencement of employment and commencement of continuous employment, if different | |
| Date employment is to end formally | |
| Arrangements on Termination | |
| Length of contractual notice to which the employee is entitled | |
| Will full notice be worked or will part be spent on garden leave? | |
| Alternatively, will the employment be ended without notice by a payment in lieu (a “PILON”)? | |
| Is a handover/completion of agreed tasks to be carried out? | |
| Do any appointments or offices the employee holds by virtue of their employment need to be resigned? | |
| Payments | |
| Current gross annual salary | |
| Accrued holiday to be paid? If so, how many days/value of untaken holiday? | |
| Any pro-rated or current year bonus to be paid? | |
| If a PILON is to be made, is this limited to salary only or will commission and/or the money equivalent of benefits be paid as well? | |
| Will the termination compensation be a lump sum or paid in instalments? (Please provide details) | |
| Is there any element of employer pension contributions to be paid? | |
| If the reason for termination is redundancy is the termination compensation inclusive or exclusive of statutory redundancy pay? | |
| Is the employee on long-term sick at the date of termination? | |
| Waiver and release of claims | |
| Are there group companies to whom the protection of the waiver and release of claims ought to be extended? | |
| Has the employee commenced a claim or claims in tribunal? | |
| Do they have a grievance that may need to be formally withdrawn? | |
| Has the employee submitted a data subject access request which is outstanding/in progress? | |
| Employer Property | |
| Are there specific items to be returned (and to whom)? | |
| Are there any client files/other items or property of other group companies to be collected back in? | |
| Has it been agreed that the employee may keep any items? If so, please provide details. | |
| Reference and Announcements | |
| Will an agreed reference be given? | |
| What about internal and external announcements? | |
| Will notice of departure need to be given to any regulator? | |
| Restrictive covenants and confidentiality | |
| Do any restrictive covenants need to be reiterated or included in the compromise agreement? | |
| Conversely, has it been agreed that specific restrictive covenants are to be waived? | |
| Undertakings | |
| To include:
· standard confidentiality? · non-disparagement? |
|
| Miscellaneous | |
| Is a re-affirmation required (this is recommended if the date of the agreement and eventual termination date are separated by a number of weeks or months and amounts to a re-execution of the waiver/release of claims and repetition of warranties etc)? | |
| Will a schedule setting out the calculation of redundancy pay be needed? | |
