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Mutual Termination Of Employment Letter for the United Kingdom

Mutual Termination Of Employment Letter Template for England and Wales

A formal document used in England and Wales that confirms the mutually agreed termination of employment between an employer and employee. It outlines the terms of separation, including the termination date, final payment details, and any additional arrangements. The document ensures compliance with UK employment law and provides legal protection for both parties by clearly documenting the voluntary nature of the termination and agreed terms.

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What is a Mutual Termination Of Employment Letter?

A Mutual Termination Of Employment Letter is used when both the employer and employee agree to end their employment relationship amicably. This document, governed by the laws of England and Wales, serves as formal documentation of the agreement and protects both parties' interests. It typically includes essential details such as the termination date, final payment arrangements, treatment of benefits, and any post-employment obligations. The letter ensures compliance with UK employment legislation and helps prevent future disputes by clearly documenting the voluntary nature of the separation and all agreed terms.

What sections should be included in a Mutual Termination Of Employment Letter?

1. Date and Address Details: Current date and full contact details of both parties

2. Employment Details Reference: Reference to current employment terms and position

3. Mutual Agreement Statement: Clear statement of mutual agreement to terminate

4. Termination Date: Specific date when employment will end

5. Final Payment Details: Breakdown of final salary, holiday pay, and other entitlements

6. Signature Blocks: Space for both parties to sign and date

What sections are optional to include in a Mutual Termination Of Employment Letter?

1. Garden Leave: Details of any garden leave period, used when protecting business interests

2. Reference Provision: Terms of employment reference, if agreed

3. Post-termination Restrictions: Reminder of any continuing obligations, if applicable

4. Company Property: List of items to be returned, if applicable

What schedules should be included in a Mutual Termination Of Employment Letter?

1. Payment Calculation Schedule: Detailed breakdown of final payment calculations

2. Company Property List: Itemized list of company property to be returned

3. Benefits Termination Schedule: Details of when various benefits will cease

Authors

Alex Denne

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

Jurisdiction

England and Wales

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions















Clauses


















Industries

Employment Rights Act 1996: Primary legislation covering statutory notice periods, final payments, accrued holiday pay calculations, and protection against unfair dismissal

Equality Act 2010: Ensures termination process is non-discriminatory and considers protected characteristics such as age, gender, disability, race, religion, etc.

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

National Minimum Wage Act 1998: Governs final payment calculations and ensures compliance with outstanding wage requirements

Working Time Regulations 1998: Regulates holiday pay calculations and compensation for unused rest breaks where applicable

Income Tax (Earnings and Pensions) Act 2003: Determines tax treatment of termination payments, including distinction between tax-free and taxable elements

ACAS Code of Practice: Provides guidelines for fair procedures and best practices in employment termination

Existing Employment Contract: Review of current contractual terms affecting termination process and obligations

Company Termination Policies: Internal company procedures and policies regarding employment termination

Confidentiality Obligations: Requirements regarding ongoing confidentiality duties post-termination

Post-termination Restrictions: Review of any restrictive covenants such as non-compete or non-solicitation clauses

Company Property Requirements: Procedures for return of company assets and property upon termination

Settlement Agreement Considerations: Requirements for valid settlement agreements if being used as part of the termination process

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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