This month's employment law briefing focuses on the
process of terminating an employment contract by way of an
agreement between an employer and an employee. This form of
termination is commonly known as a "compromise agreement"
or "separation agreement".
A compromise agreement entered into between an employer and an
employee sets out the terms for termination of an employment
contract.
In practice, an employer may consider entering into a compromise
agreement either:
- where there is insufficient proof to
justify the termination of an employment contract on the grounds of
conduct, capacity or incompatibility; and/or
- an employer is unwilling to go
through the usual procedure for terminating an employment contract
(which can be lengthy, costly and difficult)
