A Layoff Agreement (also known as a Settlement Agreement in the UK) is used when employment is terminated through redundancy or similar circumstances under English and Welsh law. The document serves to formally record the termination terms, including financial arrangements, timing, and mutual obligations. It provides legal protection for both employer and employee by including a waiver of potential claims, subject to statutory requirements including independent legal advice. The agreement typically addresses redundancy payments, notice periods, tax treatment, and post-employment restrictions.
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1. Parties: Identification of employer and employee
2. Background: Context of the redundancy/layoff situation
3. Definitions: Key terms used throughout the agreement
4. Termination Date: Specific date employment will end
5. Payment Terms: Details of redundancy payment, notice pay, and other financial considerations
6. Tax Treatment: Tax implications of payments
7. Waiver of Claims: Employee's waiver of legal claims against employer
8. Confidentiality: Obligations regarding confidential information
1. Garden Leave: Terms of garden leave if applicable during notice period
2. Post-termination Restrictions: Continued validity of existing restrictions or new ones
3. Reference: Terms of employment reference
4. Company Property: Return of company property provisions
1. Schedule 1: Payment Calculation: Detailed breakdown of all payments
2. Schedule 2: Claims Being Settled: List of specific claims being waived
3. Schedule 3: Adviser's Certificate: Independent legal adviser's certification
4. Appendix 1: Agreed Reference: Form of agreed reference if applicable
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