Warning ref. Compromise Agreements and Mortgage Insurance

Dudley_1066

I have been given notice of redundancy and my employer is requesting that I sign a Compromise Agreement. Having read through some threads here I spotted a point that could be an important factor.

The Mortgage Protection Insurance may not pay out if a compromise agreement has been signed. The Insurance Company may classify this as Voluntary Redundancy as you have agreed to it.

If you have a mortgage, before you agree to anything, make sure that you have checked this. It may influence your decision.

getmore4less

The imnportant thisng is to ask why they want a CA,

If it is a genuine redundancy there is no need for a CA they protect the employer a lot more than the employee.

Negotiate a as part of the CA a letter saying that you are redundant.

The insurance company probably cannot see the CA most have confidentiality clauses.

SJ1

Hi

I think that these two are quite different.

1. A compromise agreement usually ends up with you agreeing to accept a lump sum in exchange for you giving up all of your rights to take them to court etc under your employment contract and brings the employment contract to an end.

2. Redundancy is a different thing, usually the company will have to undertake quite a detailed procedure in order to make redundancies etc and they have to be able to back up the decisions they have made, why those jobs aren't required any more etc.

Companies try to avoid 'redundancy' as this stops them hiring for a set period of time after the redundancy programme.

I think you need to ask is it redundancy or not. I had something similar where I accepted a voluntary dismissal which was effectively a 'compromise agreement'. They called it a compromise, got your agreement and then didn't have the restrictions that a redundancy programme would have applied to them. Sounds like your company are doing something similar. Two achieve very similar ends but as I said they are quite different - it's splitting hairs if you ask me but important from company perspective.

At the end of the day - are you happy to take the cash in exchange for losing your job or not? Usually a compromise is an agreement that you have to agree to and sign to, usually they can't make you do it and you can 'force' them to make you redundant although I imagine you would get less and it would be a bit of a painful time at work.

Hope that helps.

S

Googlewhacker

getmore4less wrote: »

The imnportant thisng is to ask why they want a CA,

If it is a genuine redundancy there is no need for a CA they protect the employer a lot more than the employee.

Negotiate a as part of the CA a letter saying that you are redundant.

The insurance company probably cannot see the CA most have confidentiality clauses.

Or they are just protecting themself from a malicious claim which could cost more anyway...

ceridwen

...and dont forget that if its a "compromise agreement" - rather than a "redundancy" that the DWP won't pay benefit for up to 6 months afterwards (as they will say you voluntarily resigned).

bigsooze

ceridwen wrote: »

...and dont forget that if its a "compromise agreement" - rather than a "redundancy" that the DWP won't pay benefit for up to 6 months afterwards (as they will say you voluntarily resigned).

I don't think this is always the case - my husband left work before Christmas through a compromise agreement and he got his JSA with no problems at all.

MilleRSV

I have just left my current employment via a compromise agreement. I would be intersted to hear from anyone who has been successful in their JSA claim. I had my intial JSA interview on the 8th of June and am still waitning to hear if I have been successful or not. I also have mortgage protection insurance, which I have been paying for over ten years. I have spoken to their claims department, and they have said that due to signing a CA things get complicated, trying to suggest that I must have resigned or volunteered, when actually my employer has stated that they have terminated my employment. The claims department have also stated that the only way that they are likely to payout is if I had not entered a compromise agreeement I would otherwise have been made compulsory redundant. Any feedback or guidance would be greatly appreciated.

MadDogWoman_2

Hi MilleRSV

I left a previous job through a compromise agreement, my JSA claim was processed successfully. I wasn't asked for details of payment or reasons for the compromise agreement.

I didn't apply to my mortgage protection as my CA would have been seen as my employment being terminated as it wasn't due to a redundancy situation.

anamenottaken

SJ1 wrote: »

Hi

Companies try to avoid 'redundancy' as this stops them hiring for a set period of time after the redundancy programme.

Just to say that there is no "set period of time after the redundancy programme" which affects what the employer can do.

If you thought that they can't recruit to the same or similar position for a specific period, like 3 months or 3 weeks, then you have a false belief. If an employer finds the day after someone has left on the grounds of redundancy that the employer needs someone to do work that is just like that done by the person dismissed, they can recruit new staff and don't have to contact the departed employee.

hcb42

I have also left via a CA and claimed JSA. Position was redundant. If you want more info, happy to PM

getmore4less

As part of a CA make sure you get a letter that says you are dissmissed by reason of redundancy.


JSA don't need to know anything else.

for PPI there may be clauses that invlove knowing how much was PILON and maybe other payments related to compensation for not actualy working like holiday pay.

PPI also seem to want to know if there was a voluntory element but AIUI in law there is no difference the reason for the dismisal is still redunancy.