Define: Exit Group
Exit Group refers to the specific set of employees, and sometimes associated pension arrangements, identified in a contract's staffing schedule as transferring away from a service provider at the end or termination of an agreement. It is defined by reference to a schedule, typically covering staffing and pensions, and is used to determine who is affected when a contract exits.
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What Exit Group Means in a Contract
An Exit Group is a defined term used in outsourcing, facilities management, and public sector service contracts to describe a discrete category of personnel who are affected by the termination or expiry of an agreement. Rather than treating every employee involved in delivering the services identically, contracts often split the workforce into different categories, and the Exit Group is one such category, typically established under a schedule dealing with staffing and pensions.
The term is most commonly seen in long-term outsourcing arrangements, particularly those involving public bodies, where continuity of employment and pension protections for staff are heavily regulated. The Exit Group concept allows the parties to identify, in advance, which individuals will be treated as transferring, retained, or otherwise dealt with when the contract comes to an end, whether through natural expiry, termination for breach, or early termination.
Because the definition ties back to a specific paragraph of a schedule, the Exit Group is not a free-standing concept. It only has meaning within the context of the wider contractual scheme that sets out staffing categories, transfer mechanics, and pension continuity obligations.
How Exit Group Is Defined or Measured
The Exit Group is usually established through a formal process set out in the staffing and pensions schedule. This process might involve the outgoing service provider preparing a list of employees who satisfy certain criteria, such as being wholly or mainly assigned to the services, and then categorizing them according to defined criteria in the schedule.
Measurement is not typically about a numerical calculation, but about correctly applying eligibility criteria to individuals. Common factors used to determine whether someone falls within the Exit Group include:
- The proportion of their working time spent on the relevant services
- Whether they were employed at the relevant measurement date specified in the contract
- Whether they are subject to any exclusions agreed between the parties
- Pension scheme membership and continuity requirements
Disputes can arise over borderline cases, so many contracts include a dispute resolution mechanism specifically for challenges to Exit Group membership, along with obligations to consult with affected employees or their representatives before the list is finalized.
Where Exit Group Appears in Agreements
The term appears most frequently in the staffing and pensions schedule of an outsourcing or services agreement, but it is cross-referenced throughout the wider contract. It may show up in termination clauses, exit management provisions, indemnity clauses relating to employment liabilities, and provisions dealing with the transfer of undertakings.
It is particularly prevalent in sectors where large-scale service transitions are common, such as Relevant Circumstances
Relevant Sectors