Jurisdiction(s):
United Kingdom

Employment settlement agreements for employers: drafting checklist covering statutory validity, tax (PENP/£30,000), pensions, shares/options, directors, public sector controls, covenants, confidentiality, references and adviser requirements

Published by a LexisNexis Employment expert

Checklists

The employer and its advisers ought to reflect on the following matters:

Preparatory steps

From the employer, gather:
- a copy of the departing employee’s latest employment contract and any other documents setting out contractual terms (note: these might sit within a staff handbook)
- particulars of the employee’s contractual benefits
- pertinent details about the employee’s pension entitlements
- information on any shares/share options held by the employee; review the Articles of Association, any relevant shareholder agreement, and share scheme documentation. See also Shares and share options below

Status of negotiations

Will discussions occur directly between the parties, or via their respective legal advisers?
How robust is the employer’s bargaining position? How credible are the employee’s existing or potential claims?
For any dismissal, is there a fair reason and has a fair procedure been followed?
Is the employer in repudiatory breach?
What is the employer initially willing to put forward, and is it a 'take it or leave it' proposal, or is it prepared to enhance the offer during talks?...

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Web page updated on 20/05/2026

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