The main problem with taking a claim to an employment tribunal, for either party, is the risk of losing the case; not only the financial cost, which can run in to thousands, but the associated damage to your name, your reputation and, to a certain degree, your integrity or brand image.

No one likes to have their shortcomings discussed in public; whether they are an employer or an employee.

If a claim goes before an employment tribunal then there is a very high probability that someone outside your organisation will be able to observe the hearing and, if they work in the media, can report freely on what you have or have not done, how many times and to whom.

Even if you win in the tribunal you may still lose in the media.

This is true for both employers and employees; everyone has heard of ‘that employee’ who was dismissed from their last job for having their fingers in the till, an affair with the boss or a multitude of other rumours ranging from taking extra breaks to assaulting customers. In most cases the rumours are a far cry from the truth, but they do make good workplace gossip.

The simplest way to ensure you avoid being taken to an employment tribunal or other court of law by an employee or former employee is not only to deal with employees fairly (whether via a disciplinary procedure or grievance process) but to consider offering a compromise agreement.

A compromise agreement is exactly what it says; you, and the other side agree to compromise; the employee finishes working, and agrees not to make any claims to the employment tribunal and the employer pays an agreed sum and, on occasion, agrees to provide a reference.

This is all completed in a confidential document and without any admissions of wrongdoing, or liability, on either part.

A compromise agreement works well in most situations as it eliminates the risk of a hearing, it eliminates the risk of stories leaking out about what may or may not have happened, it costs a fraction of what a solicitor would charge you to go to a tribunal, but above all it is private; no one other than those involved need to know the details.

So whether you are an employer looking to dismiss someone or an employee who thinks they may have a claim for unfair dismissal, but would rather avoid pursuing the matter to a full hearing; a compromise agreement could be what you are looking for.

* Gillian is head of employment law at Ingrams Solicitors in York.