A Dismissal Settlement Agreement is commonly used in England and Wales when employment is terminated by mutual agreement or in potential dispute situations. This document serves as a full and final settlement of all claims between the parties, offering protection to employers while providing employees with negotiated benefits. The agreement must meet strict legal requirements, including independent legal advice for the employee, specific statutory references, and clear terms regarding payments and obligations. It typically includes details about severance packages, confidentiality obligations, post-termination restrictions, and reference provisions.
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1. Parties: Identification of employer and employee with full legal names and addresses
2. Background: Brief context of employment relationship and circumstances leading to termination
3. Definitions: Key terms used throughout the agreement including defined terms for Termination Date, Settlement Payment, etc.
4. Termination Date: Specified date of employment termination and confirmation of last working day
5. Settlement Payments: Details of all payments to be made, including statutory, contractual and ex-gratia payments
6. Tax Indemnity: Employee's agreement to indemnify employer for any tax liability arising from settlement payments
7. Waiver of Claims: Employee's comprehensive waiver of all employment-related claims against the employer
8. Legal Advice: Confirmation of independent legal advice received and adviser details
1. Post-Termination Restrictions: Restraints on future employment activities and competition, used when protecting business interests is crucial
2. Reference: Terms of future employment references and agreed form of reference
3. Company Property: Provisions regarding return of company assets and confirmation of deletion of company data
4. Garden Leave: Terms of any garden leave period before final termination date
5. Confidentiality: Additional confidentiality obligations beyond employment contract
6. Outplacement Support: Details of any career transition or outplacement support being provided
1. Schedule 1 - Claims: Detailed list of statutory claims being settled under the agreement
2. Schedule 2 - Adviser's Certificate: Independent legal adviser's certification confirming advice given
3. Schedule 3 - Agreed Reference: Template of agreed employment reference to be provided
4. Schedule 4 - Post-Termination Restrictions: Detailed restrictions carried forward from employment contract or new agreed restrictions
5. Schedule 5 - Payment Schedule: Detailed breakdown of all payments including timing and tax treatment
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