TUPE and Compromise Agreement

DSteelle

We are to be TUPE transferred in a few months and are likely to sign compromise agreements at the same time, which is linked to the fact that we will be made redundant at some time in the not too distant future (likely to be at least a year).

The company we are to transfer to have offered a small amount to sign the compromise agreement. There is also a termination bonus when we are finally made redundant.

Having read up on compromise agreements they are typically aimed at removing people from a company, but as we are not expected to be made redundant for some time we're slightly confused as to how the company benefits from this.

So two questions really,
1) How does the company benefit from getting us to sign
2) What would a typical monetary figure be to sign a compromise agreement in this situation

jazzyman01

A compromise agreement is usually signed when terminating employment and not before. The company benefits because you waive all rights to take the Company to employment tribunal etc which is obviously beneficial to the Company. There is no typical monetary figure, it depends on service, salary etc. It is usual, however, to have a sum that is more that you would get under redundancy or why would you sign? You must have an independent legal adviser to review the documents and the company usually covers some of this expense. If you do not have this legal advice, it is not binding.

DSteelle

Thanks for the reply jazzy.

Monetary figure - we would still be getting statutory redundancy pay when we are made redundant, so the figure offered would be on top of redendancy

Legal adviser - there currently is no written agreement, so it's difficult to get legal advice on the details.

Does this mean the compromise agreement is actually something else?

Really I'm trying to understand why they want to get us to sign the agreement, why exactly do they think we might take them to a tribunal, especially if we aren't to be made redundant for some time?

SarEl

Compromise agreement may be about termination of employment - they do not have to be. They are what they say on the packet - an agreement to compromise something (and it can be anything!).

You cannot sign away or compromise something that has not happened yet - that simply isn't possible. So whatever they are about, they are not about the redundancy. It would tehrefore seem to suggest that the thing that is being compromised is the TUPE - and I would want to be very very clear about why I was doing that before I signed, in your shoes. Especially since one of your rights is the right to not be selected for redundancy based on a TUPE transfer! Compromising a TUPE is irregular and uncommon, and I certainly wouldn't even consdier agreeing, never mind signing unless I knew why it was necessary for the employer to think they were vulnerable!

DCodd

Why have they told you that you will be made redundant after a year? If they have agreed to a transfer under TUPE you will have continuity of service and any redundancy would have to include the years you worked for your previous employer too i.e. say, 10 years to date plus the year worked for the new emplyer means 11 qualifying years.


As SarEl says, I would be very very suspicious of an employer asking for a compromise agreement before they transfer you via TUPE.

DSteelle

Thanks for the point of view SarEl and DCodd.

Redundancy at the end of the year will be because the job will genuinely no longer exist.

The statutory redundancy payment is expected to include previous years of service, everything looks genuine in terms of being made redundant at the end.

You've given me some direction, thanks.