Employee Termination Agreement And Release for the United Kingdom

Employee Termination Agreement And Release Template for England and Wales

A legally binding document governed by the laws of England and Wales that formalizes the termination of employment between an employer and employee. It sets out the terms of separation, including final payments, benefits, confidentiality obligations, and mutual releases of claims. The agreement provides legal protection for both parties and typically includes independent legal advice certification to ensure enforceability.

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Employee Termination Agreement And Release

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What is a Employee Termination Agreement And Release?

The Employee Termination Agreement And Release Template is essential when formally ending an employment relationship under English and Welsh law. It's typically used in situations involving redundancy, mutual separation, or negotiated exits. The document protects both employer and employee by clearly defining termination terms, financial settlements, ongoing obligations, and mutual releases. It must comply with UK employment legislation and usually requires independent legal advice to be enforceable. This agreement is particularly important for managing legal risks and ensuring a clean break between parties.

What sections should be included in a Employee Termination Agreement And Release?

1. Parties: Identifies the employer and employee with full legal names and addresses

2. Background: States employment history, reason for termination, and purpose of agreement

3. Definitions: Defines key terms used throughout the agreement

4. Termination Date: Specifies the official end date of employment

5. Final Payment Terms: Details all final payments including salary, benefits, and statutory payments

6. Release of Claims: Mutual release of claims between parties, subject to statutory restrictions

7. Confidentiality: Ongoing confidentiality obligations and restrictions

8. Return of Property: Requirements for returning company property and confirmation process

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

1. Garden Leave: Terms and conditions of garden leave period, if applicable to the termination

2. Reference: Terms of future employment references and agreed format

3. Post-termination Restrictions: Non-compete and non-solicitation clauses, if applicable

4. Share Options: Treatment of existing share options and equity arrangements

What schedules should be included in a Employee Termination Agreement And Release?

1. Schedule 1: Payment Calculation: Detailed breakdown of all payments including salary, benefits, and statutory entitlements

2. Schedule 2: Company Property: Comprehensive list of company property to be returned by the employee

3. Appendix A: Agreed Reference: Template of the agreed reference to be provided to future employers

4. Appendix B: Adviser's Certificate: Independent legal adviser's certification confirming advice given to employee

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

Jurisdiction

England and Wales

Publisher

Genie AI

Document Type

Cancellation Letter

Sector

Sales

Cost

Free to use
Industries

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

Equality Act 2010: Comprehensive anti-discrimination legislation protecting against discrimination based on protected characteristics, affecting how release clauses must be drafted to ensure they don't improperly waive discrimination rights

Companies Act 2006: Legislation governing director's duties, obligations, and company property returns if the employee holds a director position

Data Protection Act 2018 and UK GDPR: Regulations concerning the handling of personal data post-employment, including data privacy rights and retention obligations

Trade Union and Labour Relations (Consolidation) Act 1992: Legislation covering collective agreements and trade union consultation requirements in termination situations

Contracts of Employment Act 1963: Fundamental legislation governing contractual obligations and notice periods in employment relationships

Working Time Regulations 1998: Regulations governing outstanding holiday pay calculations and working time records that must be considered in termination agreements

Limitation Act 1980: Legislation setting time limits for bringing claims and statutory limitations on waivers in termination agreements

Protected Disclosures Act 1998: Whistleblowing legislation that prevents contracting out of whistleblowing rights and requires specific provisions for protected disclosures

National Minimum Wage Act 1998: Legislation ensuring all payments in termination agreements meet minimum wage requirements

ACAS Code of Practice: Practical guidance on handling dismissals and grievances that must be considered when drafting termination agreements

Income Tax Act 2007: Tax legislation affecting how termination payments should be structured and reported

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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