Employee Retention Credit Agreement Template for England and Wales

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Key Requirements PROMPT example:

Employee Retention Credit Agreement

"I need an Employee Retention Credit Agreement for our senior software developer who we want to retain during our upcoming merger, with a retention bonus of £50,000 payable in two installments between January 2025 and December 2025, subject to continued employment and meeting specific performance targets."

Document background
The Employee Retention Credit Agreement is designed for use when organizations need to secure the continued employment of valuable staff members during critical periods such as mergers, acquisitions, organizational restructuring, or other significant business events. This document, governed by English and Welsh law, provides a framework for offering financial incentives while protecting both employer and employee interests. It typically includes detailed payment structures, performance requirements, and conditions for receiving the retention credit, while ensuring compliance with UK employment and tax regulations.
Suggested Sections

1. Parties: Identification of employer and employee

2. Background: Context of the retention agreement and employment relationship

3. Definitions: Key terms used throughout the agreement including Retention Period, Retention Payment, and other defined terms

4. Retention Period: Specification of the duration of the retention commitment and any relevant dates

5. Retention Payment: Details of the retention bonus amount, structure, and payment timing

6. Payment Conditions: Specific conditions that must be met for the employee to receive the retention payment

7. Termination Provisions: Circumstances under which the agreement can be terminated and consequences of termination

8. General Provisions: Standard contractual provisions including governing law, entire agreement, and variation

Optional Sections

1. Confidentiality: Terms regarding the treatment and protection of confidential information during and after the retention period

2. Non-Competition: Restrictions on working for competitors during and after the retention period, applicable for senior employees

3. Performance Criteria: Specific performance targets and metrics that must be met in addition to retention requirements

4. Tax Provisions: Specific provisions regarding the tax treatment of retention payments and responsibilities

5. Dispute Resolution: Specific procedures for handling disputes related to the retention agreement

Suggested Schedules

1. Schedule 1 - Payment Structure: Detailed breakdown of retention payments, including amounts, dates, and calculation methods

2. Schedule 2 - Performance Metrics: Detailed performance criteria and measurement methods if payment is linked to performance

3. Schedule 3 - Existing Employment Terms: Reference to and integration with existing employment contract terms

4. Schedule 4 - Confidentiality Obligations: Detailed list of confidential information and specific obligations regarding their protection

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Clauses
Relevant Industries
Relevant Teams
Relevant Roles
Industries

Employment Rights Act 1996: Primary legislation governing employment rights in England and Wales, providing framework for basic employment protections and obligations

Equality Act 2010: Legislation ensuring non-discrimination in employment practices and preventing unfair treatment based on protected characteristics

National Minimum Wage Act 1998: Legislation establishing minimum compensation requirements that must be considered in any retention agreement

Working Time Regulations 1998: Regulations governing working hours and conditions that may impact retention agreement terms

Income Tax (Earnings and Pensions) Act 2003: Tax legislation governing how retention payments and bonuses are treated for tax purposes

Finance Acts: Various acts containing tax provisions that may affect how retention payments are structured and taxed

Unfair Contract Terms Act 1977: Legislation controlling unfair terms in contracts, ensuring retention agreement terms are reasonable and enforceable

UK General Data Protection Regulation: Regulation governing how employee personal data must be handled and protected in retention agreements

Data Protection Act 2018: UK's implementation of data protection requirements, complementing UK GDPR in protecting employee data

Financial Services and Markets Act 2000: Legislation potentially relevant if retention agreement involves financial services employees or regulated entities

Companies Act 2006: Corporate legislation affecting how companies can structure retention agreements, especially for senior employees

Common Law Restraint of Trade: Legal principles ensuring retention agreements don't unreasonably restrict employee's future employment opportunities

Consideration Principles: Common law requirements ensuring proper consideration is given for retention agreements to be legally binding

Corporate Governance Codes: Guidelines and best practices for listed companies regarding employee retention and remuneration structures

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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