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Compromise Agreement Template

This Compromise Agreement (this “Agreement” or this “Compromise Agreement”), effective as of [DATE] (the “Effective Date”), is made and entered into by and between [EMPLOYER NAME], registration number [NUMBER], a company organized and existing in England, with offices located at [ADDRESS] (hereinafter “Employer”), and [EMPLOYEE NAME] (hereinafter “Employee”).

What is a compromise agreement?
A compromise agreement is a document involving an employer and an employee which specifies the responsibilities and outcomes of the employee’s severance or separation from the employer and must be produced under specific legal guidelines.


a. Employee has been employed by Employer as of [DATE] under the terms and conditions of Employee’s employment contract with Employer (the “Employment Agreement”),  and

b. Employee will no longer be employed by Employer as of [DATE] (the “Separation Date”), and

c. The parties hereto (collectively referred to herein as the “Parties) wish to set forth their agreement with respect to the termination of Employee’s employment with Employer, and

d. The Parties intend for this Agreement to be a statutory “compromise agreement” between the Parties,

NOW, THEREFORE, in consideration of the foregoing, and of the mutual covenants, agreements, and promises set forth herein, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

PandaTip: Compromise Agreement is the name used in the European Union for severance or separation agreements in the United States. There are statutory and regulatory frameworks that govern these agreements so be sure to consult with legal counsel to ensure you have the appropriate legal notices included. You can also use our free Settlement Term Sheet Template to dictate the rules of separation beforehand.


Employee hereby accepts and confirms that Employee’s employment with Employer will terminate on the Separation Date for the following reason(s):

PandaTip: Consult a lawyer or advisor in the drafting of this Section as there may be legal implications.


Prior to and including the Separation Date, Employee will be paid Employee’s regular compensation less any customary taxes, and will receive all benefits currently given, all in accordance with the Employment Contract and any Employer policies in effect. Employee has read and understands all Employer policies.

As of the Separation Date, Employee shall be entitled to an extra, voluntary payment in the amount of [DOLLAR AMOUNT] in accordance with the Employment Agreement between the Parties.


Employer agrees to pay an amount up to [DOLLAR AMOUNT] to the advisor of Employee who is acting on Employee’s behalf related to the closure of this Compromise Agreement. Any such payment will be for actual legal costs incurred in connection with such closure of this Compromise Agreement.

PandaTip: Law stipulates that Compromise Agreements must be signed by an advisor acting on the Employee’s behalf. It is not unusual for the Employer to reimburse the Employee for the cost of such advisor.


Upon termination of Employee’s employment occurring as of the Separation Date, Employee shall not be entitled to receive any benefits from Employer, and all such benefits shall terminate contemporaneously with Employee’s termination of employment.

Within [NUMBER] days of the Separation Date, all confidential and proprietary information of Employer, including Employer’s affiliates, subsidiaries and its parent and their affiliates and subsidiaries (“Employer Entities”) and all property belonging to any Employer Entities, which is in the possession or control of Employee, shall be returned by Employee to Employer, or, at Employer’s option, destroyed and certified as destroyed by Employee. Employee shall not retain for itself any copies of any such information, material or property.

Additionally, Employee understands and agrees that the terms and conditions of the confidentiality agreement signed by Employee shall survive any termination of Employee’s employment with Employer as described herein, and Employee agrees to fully comply with the terms and conditions of such confidentiality agreement. Employee will not disclose the contents of this Compromise Agreement to any third party.

PandaTip: If there are any other obligations of the parties, you will want to include that in Section 4 above.


Except for those things which may not be waived as a matter of applicable law, to the fullest extent Employee hereby waives and releases Employer from any other claims, whether for breach of contract or pursuant to statute or tort against any Employer Entities, and whether such claims exist now or may exist in the future, to the extent that such claims arise out of or are in any way connected with the Employment Agreement, this Compromise Agreement and/or the employment term of Employee and/or the termination of Employee’s employment, and regardless of whether such claims were foreseeable or not. The aforementioned claims include, and are expressly not limited to, any claims for sums or benefits following the Separation Date, unless otherwise expressly stated herein to the contrary.


By execution hereof, Employee represents and warrants that Employee has taken advice from the advisor mentioned in this Agreement above and that such advisor is an independent advisor and has provided advice on all terms and conditions of this Agreement and the consequence or effect of those terms and conditions. Having taken the advice of such advisor, Employee represents and warrants that Employee is not aware of any claim Employee could bring against Employer Entities nor any circumstance(s) that could give rise to such a claim.


This Agreement shall be governed by and construed in accordance with the laws of England and the parties hereby consent to the exclusive jurisdiction of the English courts.


This Compromise Agreement shall constitute a binding agreement immediately upon signature by Employer, Employee and the aforementioned adviser.


Except for those obligations set forth in the Employment Agreement and any other agreement between Employer and Employee which by their nature continue to apply after the Separation Date, this Agreement constitutes the entire agreement between the Parties and supersedes all prior understandings, agreements, warranties, commitments and discussions between the Parties, whether written or oral.

In Witness Whereof, this Agreement has been duly executed by the duly authorized representatives of the parties, as set forth below.


_________________________________    ______________

[NAME], [TITLE]                                                DATE


_________________________________    ______________



_________________________________    ______________


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