To think she’s lying? Or do companies really do this?

I suspect your friend has made light of the events leading up to compromise agreement. I bet she’d had months of stress. Firms don’t enter into them for no reason. They do them to avoid adverse publicity, tribunal claims and any issues with regulator of profession.
Lawyers do secure decent settlements as salaries high, they negotiate for a living, they record everything and no firm wants an SRA investigation.

I had a settlement agreement this year that was equivalent to 4 months wages. I actually wish I had stayed and gone through a tribunal now because I had proof that I was being victimised and bullied. Even the solicitor I saw said I had a good case but I just wanted out!

I worked for a finance company about 20 years and this was definitely going on then. If they just don’t like an employee but don’t have legal grounds to dismiss them, then they offer them a fat pay off so they can get rid of them without being sued for unfair dismissal. In fact, come to think of it, I was there as a temp for 12 months after which they offered me a permanent job with a 6 month probationary period. I thought everything was ok apart from the fact that my boss was always comparing me unfavourably with his ex PA from a previous company (“SHE used to do X Y and Z for me” - stuff like giving him her personal mobile number and being okay with him ringing her for stuff out of work hours). Anyway, at the end of my probationary period I was marched into a meeting with PR and several senior directors and was told a pack of lies about not doing my job properly so they weren’t going to take me on permanently. I’m pretty sure they could have got rid of me without all those excuses because I was still on probation. They then paid me £5k which I’d never asked for and I was just a humble PA not a director on a £100k salary. I was then escorted from the building by security, via my desk to collect my belongings. It was an open plan office apart from the director, and the whole department was hiding in his office with the door closed and they’d sent the other PA who I was good friends with home (turned out she knew nothing about it until she arrived at work on the Monday and I wasn’t there). The whole thing was utterly bizarre and over the top but I just think it shows how paranoid these companies are about being sued and the lengths they’ll go to to avoid it. It’s a horrible toxic industry to work in anyway.

Yes, mine did, but my lawyer was crap.

"It might sound fun but that would have been incredibly frustrating for him. Imagine being paid off to not be able to use your skill set that you’ve honed for many years and have to do gardening instead. He’d have been bored to tears"

How privileged can you be to be complaining about a year's paid holiday!

Yes companyies pay it. There are three sides to every story though. The Employer's, the Employee's and the Truth. Performance management is time consuming and difficult. Conduct issues are often high risk unless there is fraud, violence or significant professional negligence. A settlement is easier. An employment tribunal is resource intensive and expensive once counsel is instructed.

There is often an agreed reference. Sadly there are always burnt bridges. The person with the deal gets another job. A director from the Employer moves to that firm. Settlement Agreements for the entirely blame free employee are rare unless part of a voluntary severance cost cutting exercise and even they often find their way to poorer performers.

There are individuals who play the system.

:) :) :)

Most people could live off 75k for a good few years lol.

£30k of the payment will be tax free if the payment is non contractual.
You've only heard friend's side of reasons for leaving.
Managing someone out can be extremely stressful and use a lot of time resource - and disruptive to the workplace for everyone. Her employers must have judged it cost efficient.

I got just a couple of thousand and was taxed :(
I was also told I would be able to access a training fund for people made redundant, but wasn't in the end.
Fortunately, the job centre did accept me as a person made redundant and didn't understand the 'agreement' to mean I'd resigned.

A lot of times these payments come after months of stress and anxiety, they aren't easy money.
The two I know had a horrendous time,
One had months and months of retaliation because they refused to do an illegal practice that could have cost them their professional license. Their life was miserable, they were frightened for the future, worried about losing their income, and distressed that the job they had loved and the career they had trained hard for could be lost. The company paid out because they knew they wouldn't win a tribunal. It was a horrible, stressful, and uncertain time for them. I wouldn't wish it on anyone.
The other has never gotten over the fact they lost their career. Something they built up over their lifetime was destroyed through no fault of their own.
don't underestimate how devastating these situations can be. It's not something I would choose willingly for the sake of 6 months pay.

Why don’t people try this more often then, these are huge sums

Because companies will only do this if they know they are on dodgy ground and if they are any good, that's not too often.

It's basically the company saying "if we give you this, will you fuck of quietly and we forget about you and you forget about us".

In my last job I had 6 months notice and £100k salary, so if they'd wanted me out, they'd have had to offer >£100k to cover notice and compo for unfair dismissal. It's also the price of a gagging clause, because law firms don't want people bad mouthing their cultural practices, especially if they know they are poor. It makes recruitment harder. And can lose some clients concerned about reputation. So your friend's settlement isn't unusual.

you always get a good reference that is the deal. I have had it done twice and walked into a job a week later each time

Yes, ex employers agreed to state it was a whole restructure with shift changes and voluntary redundancy option. There are nearly always non-disclosure clauses drawn up by solicitors so OP might want to advise her friend to be careful how many people she is telling.

99.9% of settlement agreements include an agreed reference

All well and good until you try to get another job and you're out or work and your previous employer won't provide a reference.

There isn't a bigger red flag for a prospective employer, and whatever payoff you get now, unless you are lucky you will lose more than that in the long-term.

Yep the Council gave me my step-up 35

Try it in Switzerland - an acquaintance was let go for being incompetent and they had to pay her for 2 years.

All these posts are making me feel terrible for accepting 40% of my annual salary to leave when 8 months pregnant and sign an NDA. That was including maternity pay... I didn't have the energy to fight it and I was told we'd probably not win at tribunal even though there were several of us. Small company though. Feel so angry at their behaviour. They really made me suffer.

Good friend of mine got £15k (half their salary) to leave quietly after being caught legless drunk at work, drinking heavily at work and borrowing company property (wearing expensive designer clothes for nights out then returning them)

You’ve lived a very sheltered life. My father was given £65,000 after he threatening to take them to a tribunal. I was paid off after my manager seemingly sacked me after I had a pregnancy loss.

I don’t think so. It’s basically the same thing. They just pay you out to stop the workplace injury claim going anywhere.

ops friend saying she was prevented from progressing and bullying is pretty much what my friend was claiming her injury for. Being bullied ect affected her mental health so she can’t work.

People try this literally all the time. I work in HR. £70k is nothing. People are incredibly litigious these days and it’s usually cheaper to pay someone off than defend a tribunal even if they are in the wrong.

My sibling recently got sacked as they voiced opinions about wrongdoing doing to friends of powerful people in the company. When they had a legal letter sent to the company stating they had evidence and would report them, they bargained £4m compensation. They are now retired and under 50.