An employment is often ended by a separate document known as a compromise agreement.
When an employment comes to an end, an employee often has various potential claims against the employer. For example:
All of these matters are often dealt with by a single agreement
made at termination, usually labelled a compromise agreement. The
effect of such an agreement is to ensure that claims cannot later
be pursued before Tribunals or Courts.
Perhaps because the compromise agreement is a separate legal document to the employment contract, it may be asserted that it deals only with the termination of employment and so only gives rise to payments and benefits within Section 401 ITEPA 2003 (see EIM13005).
However, there may well be elements included in the compromise agreement that are chargeable under other Sections, particularly Section 62 or Section 225 ITEPA 2003. EIM12856 gives more detail about this.