compromise agreement section 203?

[rocklolo]

Can anybody tell me what is a section 203 compromise agreement in a work contract.
Do not tell me to look at the work contract as it is not stated in!
thanks for your help

[Buenchico]

The Employment Rights Act 1996 gives employees a number of statutory rights. See the list of sections for an indication of what's covered by the Act:
http://www.opsi.gov.uk/acts/acts1996/1996018.h tm

Section 203 invalidates any arrangement which would attempt to allow employers or employees to contract out of the provisions of the Act. (e.g. irrespective of what the employees contract says or what he agrees with his employers, he retains the right to refer relevant disputes to an industrial tribunal). However, Section 203 also recognises that there may be occasions when it would be sensible to permit an agreement which would normally be invalidated by the Act. e.g. in order to resolve a particular dispute, it might be sensible to come to an agreement whereby the employer agrees to a certain course of action if the employee gives up his right to refer the matter to a tribunal. This is referred to as a 'compromise agreement'. (There are very strict conditions regulating compromise agreements, including that the employee must have received independent advice from a qualified lawyer):
http://www.opsi.gov.uk/acts/acts1996/ukpga_199 60018_en_18#pt13-ch2-pb2-l1g203

Chris

[buildersmate]

Good technical answer (as always) Chris.
Cutting to the chase, these agreements are often used by employers who wish to terminate an employee's contract, who are willing to pass a bucket of money across to the employee for doing so (in excess of any monetary sums covered by redundancy) and want to ensure there is no comeback from the employee afterwards around 'it was unfair what you did to me'.

[rocklolo]

thanks so much for your feed back it is very interesting !
An another question:

8 years in compagny, recovering from long term illness, wants to leave compagny, compagny wants to get "rid"
off him!
What should be the level of payout?

[Buenchico]

It's difficult to answer your new question because it depends upon who's defining the meaning of the word 'should'. (A company shareholder might take a very different view to that of the employee's union representative). There's no statutory figure for terminating a contract by mutual agreement.

However, if the company was to make the employee redundant, he'd be entitled to a minimum of 12 weeks pay (capped at �310 per week) if the whole of his service occurred after the age of 41. To calculate the relevant amount for younger employees see here:
http://www.direct.gov.uk/en/Employment/Employe es/RedundancyAndLeavingYourJob/DG_10029836
The amount he would get if he was made redundant would seem to provide a starting point for any negotiations regarding a 'pay-off' for his voluntary departure.

Chris