A case was reported from the Queens Bench Division yesterday where an employee compromised out of their position by signing a binding Compromise Agreement in exchange for a payment.

Within the Compromise Agreement there was a clause warranting that the employee knew of no circumstances which would entitle the employer to have terminated the employee’s employment without notice.

Before the employer made the payment under the agreement and after the employee had left, the employer became aware of circumstances that would have entitled it to dismiss and therefore the employer refused to pay.

The Court ruled that a Compromise Agreement was binding and prevented the employee from taking the matter to Tribunal. The employer was not obliged to pay out the sums agreed in the Compromise Agreement because of the employee’s breach of warranty.