Government corrects Equality Act wording on compromise agreements

11 March 2012
Government corrects Equality Act wording on compromise agreements

From 6 April 2012, the Equality Act 2010 will be corrected to ensure that compromise agreements are enforceable.

A compromise agreement is an contract in English law between an employer and employee where the employee agrees he will make no claim against the employer at tribunal, in return for a financial sum.

Under the Equality Act, an independent advisor was required to advise the complainant (the employee) on the compromise agreement. However a qualified solicitor would not count as an independent advisor, if he/she was acting for someone signing the contract. The concern was that an apparent drafting error meant the formalities of the compromise agreement had become impossible to satisfy.

Some commentators argued that the drafting error would not be interpreted literally by the courts. However the drafting correction now means that there is no risk that this will present an issue.

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