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Employee Release Agreement Template for England and Wales

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Key Requirements PROMPT example:

Employee Release Agreement

"I need an Employee Release Agreement for a senior software developer who is leaving by mutual agreement on March 15, 2025, with a settlement payment of £50,000 and continued health benefits for 3 months."

Document background
The Employee Release Agreement is commonly used in England and Wales when employment relationships are terminated by mutual agreement or as part of a settlement. This document serves to protect both employer and employee interests by clearly defining termination terms, including financial arrangements, confidentiality obligations, and mutual releases of claims. It must comply with UK employment law requirements, including the Employment Rights Act 1996 and the Equality Act 2010. The agreement becomes legally binding only after the employee receives independent legal advice, making it an essential tool for managing employment terminations while minimizing legal risks.
Suggested Sections

1. Parties: Identifies the employer and employee entering into the agreement

2. Background: Sets out the context of the employment relationship and reason for termination

3. Definitions: Defines key terms used throughout the agreement

4. Termination Date: Specifies the official end date of employment

5. Payment Terms: Details all payments to be made to the employee

6. Tax Treatment: Explains tax implications of payments

7. Claims Release: Employee's waiver of claims against employer

8. Confidentiality: Obligations regarding confidential information

Optional Sections

1. Garden Leave: Terms of garden leave provisions during notice period

2. Reference: Terms of employment reference to be provided

3. Post-termination Restrictions: Restrictive covenants and non-compete obligations

4. Company Property: Provisions regarding return of company assets and property

Suggested Schedules

1. Schedule 1: Claims: List of statutory claims being settled under the agreement

2. Schedule 2: Payment Breakdown: Detailed breakdown of all payments to be made

3. Appendix 1: Adviser's Certificate: Independent legal adviser's certification of advice given

4. Appendix 2: Agreed Reference: Form of agreed reference template if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions

































Clauses






























Relevant Industries
Relevant Teams
Relevant Roles
Industries

Employment Rights Act 1996: Primary legislation governing basic employment rights, unfair dismissal provisions, and statutory redundancy payments

Equality Act 2010: Covers protection against discrimination, protected characteristics, and equal pay provisions in employment

Employment Protection (Consolidation) Act 1978: Regulates employee rights during employment and termination provisions

Trade Union and Labour Relations (Consolidation) Act 1992: Governs collective bargaining rights and trade union consultation requirements

Data Protection Act 2018 and UK GDPR: Regulates the handling of personal data and privacy rights in employment context

Contracts of Employment Act 1963: Sets out basic contractual requirements and terms and conditions for employment

Limitation Act 1980: Establishes time limits for bringing claims and statutory limitations

Companies Act 2006: Covers director duties and corporate governance requirements if applicable to the employee

Common Law Principles: Encompasses breach of contract, confidentiality obligations, and enforcement of restrictive covenants

ACAS Code of Practice: Provides guidance on proper procedures and best practices in settlement agreements

Income Tax (Earnings and Pensions) Act 2003: Governs the tax treatment of termination payments and other employment-related payments

National Insurance Contributions Regulations: Determines the NIC treatment of payments and benefits under the release agreement

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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