PO Box 28287
Telephone: 0131 662 6988
Fax:0131 667 8175

23 Cramond Glebe Rd
Cramond Village
Telephone: 0131 336 1619

Free EnquiryCompromise Agreement Scotland

Why should you bother with a Compromise Agreement in Scotland?

If your employer is offering you redundancy you may be asked to sign a Compromise Agreement. Why should you both signing a Compromise Agreement and what are the consequences of you doing so?

Independent Legal Advice

Before you sign a Compromise Agreement you should be advised by your solicitor to seek independent legal advice. You should not sign a compromise agreement before doing so. Even more importantly, your solicitor should pay for your independent legal advice so the costs will not come out of your compensation. It is therefore vital that you seek independent legal advice from a specialist employment solicitor before you sign a Compromise Agreement.

Are You Receiving A Fair Settlement?

When your employer makes you an offer to pay you compensation if you leave their employment, how will you know if it is a reasonable offer in settlement? The point is it is very unlikely that you would understand what is a good offer. Therefore, seeking an opinion from an expert employment specialist ensures that the offer will be reviewed and assessed and you will be told whether you should accept it or request a larger sum of compensation. Only by receiving this advice can you be fully sure that your employer is making a reasonable offer in settlement of your claim for you.


If you are being offered a Compromise Agreement as a result of your redundancy, you need to understand whether that redundancy is fair. When you obtain your independent legal advice from a specialist employment solicitor, they will look at the grounds for redundancy and will advise you whether they are appropriate in your case.

Some reasons that might lead to the redundancy being unfair include:

  1. Failure by your employer to follow the correct redundancy process and procedures;
  2. Failure by your employer to consult their staff about the redundancies; and
  3. Failure to have a genuine reason for the redundancy.

Your solicitor will be able to tell you whether the reason for your redundancy is genuine. If it is not, they can advise you what further action you can take.

Restrictive Covenants

A restrictive covenant prevents you from taking some action after your employment with your current employer ends. A restrictive covenant can have serious consequences on your ability to obtain future employment and therefore if your employer attempts to include any restrictive covenants in your Compromise Agreement you must seek independent legal advice. There are three main types of restrictive covenant which we look at below.


A restrictive covenant can be included in the Compromise Agreement which prevents you from working with any competitor of your clients. This can be anywhere in the country or anywhere within a certain distance of your current employer. It is therefore vital that you understand whether the restrictive covenant is reasonable in the circumstances before you sign the Compromise Agreement.

2. Geographical Restrictions

Another restrictive covenant is one that limits you from working within a certain distance of your current employer. This does not necessarily have to be limited to competition but could be limited to a number of different types of businesses. Once again, it could severely affect your ability to obtain future employment.

3. Poaching

A restrictive covenant can also be included to prevent you poaching employees from your former employer. If you are going to work for a new firm, one thing your new employer might ask is whether any of the staff at your former place of work were worth employing. This could make you more attractive to a new employer but a restrictive covenant preventing you from poaching former employees could prevent this.


A Compromise Agreement should ensure that you are receiving the right amount of compensation from your employer, but it can also be used to hide restrictive covenants that could have damaging consequences on your future employment prospects. Therefore, before signing a Compromise Agreement or accepting a redundancy payment it is absolutely vital that you seek specialist independent legal advice.

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