Employment Promissory Note Template for England and Wales

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Key Requirements PROMPT example:

Employment Promissory Note

"I need an Employment Promissory Note to formalize a deferred bonus payment of £50,000 to our senior software engineer, with monthly installments starting from March 2025 and including a 5% annual interest rate."

Document background
An Employment Promissory Note is commonly used when an employer needs to formalize a payment obligation to an employee, such as deferred compensation, bonuses, or other employment-related payments. This document, governed by English and Welsh law, provides security and clarity for both parties by establishing specific payment terms, conditions, and remedies in case of default. The promissory note combines elements of employment law with financial obligations, making it a crucial tool for managing employment-related financial commitments.
Suggested Sections

1. Parties: Identification of the employer and employee

2. Promise to Pay: Unconditional promise to pay a specified sum

3. Payment Terms: Amount, due date, and payment method

4. Interest Rate: Applicable interest rate and calculation method

5. Default Provisions: Consequences of non-payment

6. Governing Law: Specification of applicable law and jurisdiction

Optional Sections

1. Security: Details of any collateral or security provided - used when the note is secured by specific assets

2. Early Repayment: Terms for early repayment options - included when early repayment is permitted

3. Assignment: Rights to assign or transfer the note - included when transfer rights are relevant

Suggested Schedules

1. Payment Schedule: Detailed breakdown of payment installments and due dates

2. Interest Calculation Schedule: Detailed method for calculating interest including examples and formulas

3. Security Details: Comprehensive description of any security or collateral provided

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 Industries
Relevant Teams
Relevant Roles
Industries

Employment Rights Act 1996: Primary legislation governing employment rights in England and Wales, providing the fundamental framework for employment relationships

Contracts Act 1999: Legislation governing the formation and enforcement of contracts in England and Wales

Law of Property (Miscellaneous Provisions) Act 1989: Legislation concerning formal requirements for creating certain types of legal obligations and property interests

Financial Services and Markets Act 2000: Regulatory framework for financial services and markets in the UK, relevant for financial instruments like promissory notes

Contract Law Fundamentals: Common law principles including offer, acceptance, consideration, and intention to create legal relations

Commercial Law - Promissory Notes: Common law principles specifically governing the creation and enforcement of promissory notes

National Minimum Wage Act 1998: Legislation ensuring minimum payment standards in employment relationships

Working Time Regulations 1998: Regulations governing working hours and conditions that might affect payment terms

Income Tax Laws: Tax legislation relevant to employment-related payments and obligations

Consumer Credit Act 1974: Legislation governing credit arrangements which may be relevant if the promissory note includes credit elements

FCA Regulations: Financial Conduct Authority regulations regarding financial instruments and obligations

Limitation Act 1980: Legislation setting time limits for enforcement of legal obligations and debt recovery

Legal Validity Requirements: Formal requirements including written form, unconditional promise, signature, specific sum, and payment terms

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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