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Number Of Workers Earning Less Than Living Wage On The Rise

Due to figures from think tank only for the last year 20% of the workforce in the UK which is about 4.8m people have claimed they earned below the so-called living wage. This means their number has risen too fast. The Resolution Foundation conducted a research the results of which point out that 25% of women and 15% of men who are employed did not manage to cover their basic needs for living in April 2012. This is the last month the search covered.

Since 2009 the number of employees receiving under the living wage had gone up by 3.4 million.

However, there are many different groups of workers who earn much less than the living wage. The worst results have been accounted for those under the age of 20 who go to work. In 77% of the cases they have received salaries far away from what they had expected. The other risk group is of the people working in restaurants and hotels.

London’s living wage is now £8.55 in London and £7.45 elsewhere.

Matthew Whittaker, report author and senior economist at the Resolution Foundation, said: “For most of the working population real wages have been flat or declining for many years and as a result more and more people have dipped below the level of the living wage.”

He added that all the parties need to think carefully about the proper way which would lead to boost in the rates of pay.In addition may be this should be written into the employment contract.

The answer that came from the government was that they were in fact encouraging all employers to give their workers much more money than the national minimum wage.

The spokesman added:

“Despite being in tough times, this Government is doing absolutely everything it can to help people on low pay with the cost of living.”


An Overview on Commission Agreements

A Commission Agreement, also known as Introduction or Finder’s Fee Agreement, is  an agreement where one party (a Supplier of goods and/or services) wishes to engage another (the Introducer) to introduce potential clients for the services and/or goods in return for a Commission. In other words, the Introducer is appointed to introduce potential clients to the Supplier in order to generate more sales and increase the customer base and the Introducer will earn a Commission in return for its efforts.

Commission Agreements are essentially a type of agency agreement, under which the agent acts as a representative of its principal but has no authority to enter into contractual arrangements on its behalf. Essentially an Introducer differs from an agent as he does not directly sell the products and/or services of the Supplier but it merely introduces potential clients to the Supplier. Once the introduction is made the Introducer will steps back, it will have no further role in the relationship between the Supplier and the introduced client; the selling and supplying of the services and/or products will be carried out directly by the Supplier.

Broadly, a Commission Agreement is where one party appoints another party to find third parties who may want to purchase goods and/or services from the first party. Commission is payable to the Introducer if the third party purchases such goods and/or services.

 A Commission Agreement is necessary in order to regulate the relationship between the parties and to set out the rights and obligations of both parties.

Under a Commission Agreement the Introducer‘s main obligation is to make introductions to the Supplier, however making an introduction does not trigger commission; commission is only payable if, following an introduction, a prospective new client enters into a contract with the Supplier for the goods and/or services. This protects the Supplier as no commission is payable unless the Supplier and the introduced new client enter into a contract.

Generally in a Commission Agreement the commission fee is calculated on the basis of net income received under a contract between the Supplier and the introduced new client for a certain period (Introduction Period). Please note that the obligation to pay commission is not affected by termination of the Commission Agreement. In other words, Commission is payable after termination in respect of contracts entered into as a result of introductions made before the termination date. This arrangement protects the Introducer against the Supplier terminating the agreement in order to escape payment of commission after a particularly lucrative new client is introduced.

Another clause that is generally found in these kind of agreements provides that commission is only payable on income actually received from any contract entered into by the supplier with a prospective new client during the introduction period. This is a supplier-favourable mechanism and protects the supplier against having to pay commission on sums never received, perhaps as a result of breach by the client or early termination.

For more information on Commission Agreements and to view a Commission Agreement Template please visit:

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Compromise Agreement

A Compromise Agreement (also known as “Termination” or “Severance Agreement”) is an agreement which enables an employee and the employer to agree that the employee will not pursue a statutory claim or claims against the employer in return for compensation.

Compromise Agreements are recognised by statute and they are an exception to the general principle set out in all employment legislation that an individual cannot contract out of their statutory employment rights. They are the only way in which an employee can contract out of their rights under employment law. They enable employees to agree to compromise their own statutory employment rights in return for compensation. The main employment rights most often compromised relate to withdrawing an existing, or subsequently refraining from bringing a, claim to an Employment Tribunal and/or the courts.

Compromise Agreements are becoming increasingly common. They are often used to safeguard the interests of both employer and employee redundancy situations. In these situations it is common practice to offer a compensation payment (also known as “Ex-gratia Payment”) above and beyond the employee’s statutory redundancy payment.

Compromise Agreements are most commonly used:

  •  To settle an existing claim an employee might have against the employer
  • To prevent an employee from claiming before an Employment Tribunal and/or the courts
  • To avoid legal challenge in redundancy situations

Provided that the Compromise Agreement is legally binding once the agreement is signed, the former employee cannot subsequently lodge a case with an Employment Tribunal or the courts. That is a major plus for the employer. In return, the employee receives an ex gratia payment and both parties agree to keep the terms of the agreement secret.

In order for a Compromise Agreement to be valid it must comply with stringent statutory conditions. There are strict and well-defined requirements to be fulfilled to ensure that a Compromise Agreement is valid. A correctly structured Compromise Agreement will be legally binding on both parties.

The following conditions must be satisfied in order for the Compromise Agreement to be valid. If these conditions are not satisfied then the Compromise Agreement is not legally binding:

  • It must be in writing
  • It must clearly identify the complaints being settled. The Agreement must specify what specific claims the employee is agreeing not to pursue
  • The employee must have received independent legal advice
  • It must be signed by a qualified adviser who must have properly advised the employee of the statutory employment rights he has agreed to compromise
  • The adviser must be covered by a suitable insurance policy. The policy must cover the adviser against the risk of a claim for losses because of the advice that has been given
  • The agreement must contain a statement to the effect that the conditions regulating compromise agreements have been satisfied

Compromise Agreements are generally marked “without prejudice and subject to contract” to prevent an employee subsequently using evidence of an offer before an Employment Tribunal or court, should an agreement not be reached between the employer and the employee.

N.B. It is a common mistake to think that, where any payment is made on termination of employment, it is not taxable unless it exceeds £30,000.

The taxation of payments made on termination of employment depends on the type of payment made to an employee. If a payment or benefit is an entitlement under the contract of employment or the payment or benefit derives from the employment, it will constitute employment income and will be subject to tax. If a payment or benefit is not employment income, it is not taxable. Thus, if a termination payment and the value of any post-termination benefits is not taxable, the first £30,000 will be tax free.

Under a Compromise Agreement an employee receives all that is due to them by way of salary and benefits up to the termination date. A payment by way of ‘compensation’ is also made to the employee. In return for this the employee agrees not to bring any claims against the employer whether through the Employment Tribunal or the courts. Effective use of Compromise Agreements helps to prevent lengthy, costly and time consuming litigation by providing the parties with a clean break.

For a fully comprehensive Compromise Agreement, suitable for settling the claim of any employee please visit: