Employment Termination Agreement Template for England and Wales

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Key Requirements PROMPT example:

Employment Termination Agreement

"I need an Employment Termination Agreement for a senior software developer who is leaving voluntarily on March 15, 2025, with garden leave provisions and specific post-termination restrictions regarding our proprietary technology."

Document background
An Employment Termination Agreement is essential when formally ending an employment relationship in England and Wales. This document is typically used when both parties wish to achieve a clean break and document all aspects of the separation, including financial settlements, continuing obligations, and mutual releases. It helps prevent future disputes by clearly setting out terms of separation, ensuring compliance with UK employment law, and protecting both parties' interests. The agreement is particularly important when dealing with senior employees, redundancy situations, or where there are potential claims to be settled.
Suggested Sections

1. Parties: Identification of employer and employee with full legal names and addresses

2. Background: Brief context of employment relationship and reason for termination

3. Definitions: Key terms used throughout the agreement

4. Termination Date: Specific date employment will terminate and confirmation of employment end

5. Final Payment Terms: Details of final salary, benefits, accrued holiday pay, and any termination payments

6. Tax Treatment: Tax implications of payments and tax indemnities

7. Company Property: Requirements for return of company property and confirmation of deletion of electronic information

8. Confidentiality: Ongoing confidentiality obligations and protection of company information

9. Settlement and Waiver: Full and final settlement of claims and statutory waivers

10. Governing Law: Confirmation that agreement is governed by laws of England and Wales

Optional Sections

1. Garden Leave: Terms of garden leave including duration and conditions during garden leave period

2. Post-termination Restrictions: Non-compete, non-solicitation, and other restrictive covenants

3. Legal Fees: Terms regarding employer's contribution to employee's legal costs

4. Reference: Agreement regarding future employment references and communications about departure

5. Outplacement Support: Details of any career transition or outplacement support provided

6. Share Options and Benefits: Treatment of existing share options, insurance, and other benefits

Suggested Schedules

1. Schedule 1 - Payment Calculation: Detailed breakdown of all payments including statutory, contractual, and ex-gratia amounts

2. Schedule 2 - Agreed Form of Reference: Template of agreed employment reference to be provided

3. Schedule 3 - Certificate of Independent Legal Advice: Confirmation of legal advice received by employee from qualified legal advisor

4. Schedule 4 - Continuing Post-Termination Obligations: List of surviving contractual obligations from employment contract

5. Appendix 1 - Company Property List: Itemized list of company property to be returned before departure

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 covering statutory notice periods, unfair dismissal provisions, redundancy payments, and protection of wages.

Equality Act 2010: Legislation ensuring protection against discrimination, equal treatment requirements, and considerations for protected characteristics in employment termination.

Employment Protection (Consolidation) Act 1978: Establishes fundamental employee rights during the termination process.

Companies Act 2006: Relevant for director duties and obligations if the terminated employee holds a director position.

Data Protection Act 2018 and UK GDPR: Governs the handling of personal data and privacy rights during the termination process.

Working Time Regulations 1998: Regulates accrued holiday pay and working time rights that must be considered in termination settlements.

Tax Legislation: Covers Income Tax (PAYE), National Insurance contributions, and specific treatment of termination payments.

Trade Union and Labour Relations (Consolidation) Act 1992: Addresses collective consultation requirements in cases of multiple terminations.

Contracts of Employment Act 1963: Establishes basic contractual obligations that must be respected during termination.

Limitation Act 1980: Sets out time limits for various types of employment claims that might arise from termination.

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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