A Severance Release Agreement is used when employment is terminated by mutual agreement or as part of a settlement of potential claims. Common in restructuring, redundancy situations, or when resolving workplace disputes, this document is governed by England and Wales law and must comply with specific statutory requirements, including the Employment Rights Act 1996. It typically includes severance payment terms, benefits continuation, confidentiality obligations, and a comprehensive release of claims. The agreement must be reviewed by an independent legal adviser to be legally binding, and special attention must be paid to tax implications of payments and statutory requirements for valid settlement agreements.
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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 reason for agreement
3. Definitions: Key terms used throughout the agreement including defined terms for Termination Date, Severance Payment, and Claims
4. Termination Date: Specific date employment ends, final working day if different, and confirmation of notice arrangements
5. Severance Payment: Amount, timing, and tax treatment of payments, including breakdown of statutory and ex-gratia elements
6. Claims Released: Comprehensive list of claims being waived by the employee, subject to statutory restrictions
7. Continuing Obligations: Ongoing duties including confidentiality, intellectual property, and company property return
8. Tax Indemnity: Employee's obligations regarding tax treatment of payments and indemnification of employer
9. Legal Advice: Confirmation of independent legal advice received and adviser details
1. Garden Leave: Terms and conditions of garden leave period, including duties and restrictions
2. Reference: Terms of future employment references and agreed form of reference wording
3. Post-termination Restrictions: Non-compete, non-solicitation, and other restrictive covenants
4. Outplacement Support: Details of any career transition or outplacement services provided
5. Company Benefits: Treatment of benefits, insurance, and share schemes post-termination
1. Schedule 1 - Payment Details: Detailed breakdown of all payments including statutory redundancy, notice pay, and ex-gratia amounts
2. Schedule 2 - Claims Being Settled: Comprehensive list of statutory and contractual claims being waived under the agreement
3. Appendix 1 - Adviser's Certificate: Independent legal adviser's confirmation of advice given as required by law
4. Appendix 2 - Agreed Reference: Template of agreed reference wording if applicable
5. Appendix 3 - Return of Property Checklist: List of company property to be returned by the termination date
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