Compromise Agreements…Sign in haste, repent at leisure

The importance of adhering to the terms of a Compromise Agreement was highlighted in the recent case of Imam-Sadeque v Bluebay Asset Management, in which the High Court found that the employer, by virtue of the employee being in breach of the terms of his Compromise Agreement, was entitled to a repayment of monies paid as part of a termination package pursuant to a claw-back clause in the Compromise Agreement.

This case emphasises the need to consider the terms of any proposed Compromise Agreement very carefully to ensure that, for any departing employee, the provisions do not cause difficulty in compliance.

On a separate but related note, this could apply where restrictive covenants are concerned which create or confirm obligations for an employee even after the employment has come to an end. These need to be considered very carefully to avoid problems in the future.

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