This is of particular legal importance, particularly where a worker has potential rights against the employer under the Employment Act 1996 or other labour laws, or where the worker has other rights of infringement. Officers and significant shareholders can sign transaction agreements if they leave their jobs when the business is sold. It is customary for a settlement agreement to be concluded shortly before or after the termination of an employee`s employment contract. These agreements are sometimes used when redundancies are made, but they can be used in a number of situations. Remember that not all employment law professionals are tax specialists! The tax treatment of payments made under a compromise agreement is difficult. .