Compensation
- Amount: Ensure the compensation reflects the value of any claims you’re waiving. Your solicitor can assess whether the offer is reasonable by comparing it to potential tribunal awards, considering factors like your salary, length of service, and the strength of your case.
- Tax Treatment: Confirm how payments are taxed. Typically, up to £30,000 of a termination payment can be tax-free, but contractual payments (e.g., notice pay, holiday pay) are taxable. Check that the agreement clarifies tax treatment to avoid unexpected liabilities.
- Payment Schedule: Verify when payments will be made (usually within 7–28 days of signing, though this varies). Ensure the agreement specifies clear timelines.
Confidentiality Clauses
- Many agreements include confidentiality or non-disclosure clauses (NDAs), restricting you from discussing the agreement’s terms or the circumstances of your departure. Exceptions are usually allowed for immediate family, legal advisers, or HM Revenue & Customs (HMRC). Check that the clause is reasonable and doesn’t overly limit your ability to discuss your experience.
- Confidentiality clauses cannot prevent you from making a protected disclosure (whistleblowing) about wrongdoing. Any clause attempting to do so is void.
Restrictive Covenants
- Check if the agreement reinforces or waives restrictive covenants from your employment contract (e.g., non-compete clauses). If these could hinder your future employment, discuss waiving them with your solicitor.
Waived Claims
- The agreement will list claims you’re agreeing not to pursue, such as unfair dismissal, discrimination, or redundancy rights. Some claims, like those for personal injury (unless known at the time), accrued pension rights, or enforcing the agreement itself, are typically excluded. Ensure these exceptions are included.
- Be aware that signing waives your right to bring listed claims, even if you later discover grounds for a stronger case (unless there’s evidence of fraudulent misrepresentation by the employer).
References
- Negotiate an agreed reference to support future job applications. Ensure the reference is fair and included in the agreement, as employers may not provide one later unless contractually obliged.
Other Benefits
- Confirm how benefits like bonuses, share options, or commissions are handled. Ensure the agreement addresses any outstanding entitlements.
- If you’re experiencing work-related stress or health issues, you could request additional support, such as counselling services, as part of the agreement.