[2][3][4] Except when ACAS have been involved and arranged a COT3 settlement, COT3 being the name of the form used,[5] compromise agreements are the only means whereby an employee can waive statutory claims such as unfair dismissal, discrimination or entitlements to a redundancy payment.
[6] The agreement will only be valid where (i) it is in writing and (ii) the employee has received independent legal advice from a relevant adviser who has professional indemnity insurance.
The Employment Rights Act 1996 provides at Section 203 for the conditions relating to the validity of Compromise Agreements.
The advantage for the employer is that they are able to draw a line under an employee's departure or complaint and are protected from future claims.
The advantage for the employee is the consideration, such as a financial sum, received in return is provided for by a legally-binding contract.