Compromise Agreements and MARS (Mutally Agreed Resignation Schemes)
- By Andrew Crisp
- Published 11/29/2010
- Legal
- Unrated
NHS bodies are offering their employees the opportunity to quit their jobs under a compromise agreement. The scheme agreed between NHS trade unions and NHS Employers is called the Mutually Agreed Resignation Scheme, although it is usually referred to as 'MARS'.
MARS allows NHS employers to offer, in limited circumstances, a compromise agreement to an employee to leave their employment voluntarily in exchange for a severance payment.
Employers will need to draw up eligibility criteria specific to their own MARS and will be expected to have done so in partnership with local staff.
A MARS scheme should not be discriminatory. For example, the NHS employer would not be able to select someone for participation in MARS just because they are of a certain age or because they suffer from a disability.
NHS Employers should not use the MARS scheme where there is an existing redundancy situation or in cases that should be dealt with under capability or conduct procedures.
Employees will receive a severance payment. The applicable payment rate is half a month's salary for each year of service, subject to a minimum payment of three months' pay, and a maximum of 12 months' pay. Payments should in all cases be subject to a compromise agreement with the resigning employee.
If you are entering into a compromise agreement under the MARS scheme, you will need legal advice on the
documents. A compromise agreement is only valid if you have had legal advice on it. Usually the employer will make a contribution to your legal costs.
Compromise agreements must include clawback provisions. This means that the employee will have to pay back the severance payment if they find work within the NHS within a certain number of months of signing the compromise agreement.
The scheme applies to Special Health Authorities and all Trusts apart from Foundation Trusts.
Employees may be concerned or reluctant to participate if, for example, redundancies are anticipated in any event. You should take legal advice on whether you would be better off signing the compromise agreement under the MARS scheme or alternatively waiting to be made redundant.
You should also consider if it is likely to be difficult to obtain alternative employment if you sign the compromise agreement. This is an important considerations in deciding whether it will be worthwhile for you to resign under the MARS scheme.
By signing a compromise agreement employees will be giving up their rights to bring any kind of legal claim against the employer, such as unfair dismissal, or discrimination. It is therefore crucial that employees have legal advice before
signing the compromise agreement.
We recommend that employees use solicitors who are experienced in advising employees under the MARS scheme and whose costs will be no more than your employer is contributing. That way there will be no charge to you.
MARS allows NHS employers to offer, in limited circumstances, a compromise agreement to an employee to leave their employment voluntarily in exchange for a severance payment.
Employers will need to draw up eligibility criteria specific to their own MARS and will be expected to have done so in partnership with local staff.
A MARS scheme should not be discriminatory. For example, the NHS employer would not be able to select someone for participation in MARS just because they are of a certain age or because they suffer from a disability.
NHS Employers should not use the MARS scheme where there is an existing redundancy situation or in cases that should be dealt with under capability or conduct procedures.
Employees will receive a severance payment. The applicable payment rate is half a month's salary for each year of service, subject to a minimum payment of three months' pay, and a maximum of 12 months' pay. Payments should in all cases be subject to a compromise agreement with the resigning employee.
If you are entering into a compromise agreement under the MARS scheme, you will need legal advice on the
Compromise agreements must include clawback provisions. This means that the employee will have to pay back the severance payment if they find work within the NHS within a certain number of months of signing the compromise agreement.
The scheme applies to Special Health Authorities and all Trusts apart from Foundation Trusts.
Employees may be concerned or reluctant to participate if, for example, redundancies are anticipated in any event. You should take legal advice on whether you would be better off signing the compromise agreement under the MARS scheme or alternatively waiting to be made redundant.
You should also consider if it is likely to be difficult to obtain alternative employment if you sign the compromise agreement. This is an important considerations in deciding whether it will be worthwhile for you to resign under the MARS scheme.
By signing a compromise agreement employees will be giving up their rights to bring any kind of legal claim against the employer, such as unfair dismissal, or discrimination. It is therefore crucial that employees have legal advice before
signing the compromise agreement.
We recommend that employees use solicitors who are experienced in advising employees under the MARS scheme and whose costs will be no more than your employer is contributing. That way there will be no charge to you.
Andrew Crisp
For further information regarding compromise agreement and a wide range of advice from experienced professionals, please visit our website at http://www.compromiseagreement.org.uk
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