Employee Termination Agreement Template for England and Wales

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Key Requirements PROMPT example:

Employee Termination Agreement Template

I need an Employee Termination Agreement Template for a senior software developer who is leaving voluntarily on March 15, 2025, with standard non-compete clauses and arrangements for unvested stock options.

What is a Employee Termination Agreement?

The Employee Termination Agreement Template is designed for use under English and Welsh law when formally ending an employment relationship. This document is essential when implementing redundancies, negotiating mutual separations, or managing dismissals. It includes crucial elements such as termination date, final compensation, benefit arrangements, confidentiality provisions, and claims releases. The agreement helps ensure compliance with UK employment legislation while protecting both employer and employee interests. It should be customized based on specific circumstances and reviewed by legal counsel before use.

What sections should be included in a Employee Termination Agreement?

1. Parties: Identification of employer and employee with full legal names and addresses

2. Background: Brief context of employment relationship and reason for termination

3. Definitions: Key terms used throughout the agreement

4. Termination Date: Specific date employment will end and final working day if different

5. Final Payment Terms: Details of salary, benefits, and other payments due

6. Company Property: Requirements for return of company assets

7. Confidentiality Obligations: Ongoing duties regarding confidential information

8. Full and Final Settlement: Waiver of claims and settlement terms

What sections are optional to include in a Employee Termination Agreement?

1. Garden Leave: Terms of garden leave when employee is put on paid leave during notice period

2. Reference: Terms of employment reference to be provided when agreed as part of settlement

3. Post-termination Restrictions: Non-compete and other restrictive covenants for senior employees or those with access to sensitive information

4. Share Options: Treatment of existing share options or awards when employee participates in share schemes

What schedules should be included in a Employee Termination Agreement?

1. Schedule 1 - Payment Calculation: Detailed breakdown of final payment including tax treatment

2. Schedule 2 - Company Property List: Itemized list of company property to be returned

3. Schedule 3 - Ongoing Obligations: Detail of continuing obligations post-employment

4. Appendix A - Form of Reference: Agreed form of reference if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Clauses
Industries

Employment Rights Act 1996: Primary legislation covering basic employment rights, statutory notice periods, unfair dismissal provisions, and redundancy payments calculations.

Equality Act 2010: Legislation ensuring protection against discrimination, fair treatment in termination process, and compliance with protected characteristics requirements.

Data Protection Act 2018 and UK GDPR: Regulations governing the handling of employee personal data, data retention requirements, and privacy considerations during and after termination.

Companies Act 2006: Legislative framework containing specific provisions for termination of employees who are also company directors.

Working Time Regulations 1998: Legislation governing holiday pay calculations and treatment of accrued leave during termination process.

Protection of Employment Regulations 2006 (TUPE): Regulations protecting employee rights during business transfers, including specific termination provisions related to business transfers.

Income Tax Act 2007: Tax legislation determining the treatment of termination payments and National Insurance considerations in severance packages.

Pensions Act 2008: Legislation governing the treatment of pension arrangements and final contributions during employment termination.

Trade Union and Labour Relations (Consolidation) Act 1992: Law covering collective agreement considerations and consultation requirements during termination processes.

Limitation Act 1980: Legislation setting time limits for claims and enforcement periods related to employment termination.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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