Executive Dismissal - Compromise agreement

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Executive Dismissal - Compromise agreement

A constructive approach

When considering an executive dismissal, first take legal advice.

How will you use the normal disciplinary procedures and will the dismissal be deemed to be fair or unfair? Should you carefully seek a negotiated severance, utilising a “Compromise Agreement”, thus avoiding publicity and the demands / delays of a tribunal case?

There are five specific types of reason which can justify dismissal:

  1. Conduct
  2. Capability
  3. Redundancy
  4. A statutory requirement
  5. Some other substantial reason

Compromise agreement
A compromise agreement is a legally binding agreement which clearly sets out financial and all other terms on which employment will end. The employee must seek independent legal advice and understand the implications of the document before signing, including an acceptance of the terms not to pursue any claim. The independent legal adviser signs a declaration to confirm the advice has been given to the executive.

References:
Dismissing staff - GOV.UK
Acas - Dismissal

By adopting a constructive approach to this situation you can minimise potential damage and provide a positive way forward, for the executive and your organisation.

An immediate replacement or help managing the inevitable gap from executive leaving and the new manager starting may be required.

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