Yes. The term "compromise agreement" was the previous name for what is now called a settlement agreement. The name changed in 2013 following amendments to the Employment Rights Act 1986, but the legal effect is identical. You may still see the older term used in some contexts.

No. A settlement agreement is entirely voluntary. You are never legally obliged to sign one. If you decline, your employer may proceed with a dismissal or disciplinary process, or the employment relationship may continue. We will advise you on the relative merits of accepting, negotiating, or declining based on your individual circumstances.

Yes, once signed by both parties and once you have received independent legal advice from a qualified adviser, a settlement agreement is legally binding. This is why it is so important to take proper advice before signing — once the agreement is executed, it is very difficult to challenge.

The law requires that an employee receives independent legal advice from a qualified adviser before signing a settlement agreement. This is a statutory requirement under the Employment Rights Act 1996. Without it, the agreement is not valid and the employee retains the right to bring employment tribunal claims. The adviser must be identified in the agreement and must sign a certificate confirming that advice was given.

An independent legal advice certificate (sometimes called an adviser's certificate) is a document signed by your solicitor confirming that they have advised you on the terms and effect of the settlement agreement. It is a legal requirement for the agreement to be valid. We provide this certificate as part of every instruction.