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

Taxed over £30k but equally she shouldn't be discussing it with anyone! Settlement agreement usually involve non disclosure clause. Very unwise of your friend - company could go after her for the money back, compensation re reputational damage.

It's called a settlement agreement.

It's usually cheaper and less hassle than performance management and a disciplinary process. And no risk of a tribunal at the end.

Those I've been involved with usually pay out about 6 months salary plus notice.

Tax must be paid on notice pay and an compensation over £30k.

You understand you then have NO JOB? You can't live off that amount of money for long and you also forgo bonuses and pension contributions. So nobody wants to actually put themselves out of a job.

Wait till you find out that in big tech companies some people are hired without the company even having or intending to ever have a job for them, they pay them a salary and get them on the books purely because they don't want a competitor to have them. They do no work and get paid to be at home doing whatever they like.

You can have two employers simultaneously. You just have to pay tax on everything you earn in the second one.

The first £30000 of your lump sum is tax free.

My company put me on garden leave for 3 months so I paid tax on 3 months salary, they also gave me a further 4 months salary as a lump sum, approx £25000. So entirely possible your friend had that lump sum.

I left a job in 2012 for one year’s salary and my legal fees paid.

Yes it happens all the time, I handled a dozen of these agreements last year but not for that amount. Only the first 30k is tax free though.

We had someone do this although less money. He was threatening people at work but we couldn't prove any of it then saying he was being discriminated against. Really pissed me off because tribunals are there to protect those who need it, not to give poor performers a payout when they get found out.

The other thing to think about though, is future employment.

I know someone who did this. And could get another law firm to take her on.

Once you are sufficiently senior, you just don't walk with nothing. Compromise agreements are pretty standard, even expected. Often get to keep their shares too so paid out under share plans several years after leaving!

Yes did this with someone on my team. She went on long term sick leave just as she was about to be fired so it was cheaper to get her to agree to go with a golden handshake then to fire her on sick leave and risk tribunal/ continue to pay her sick pay

I want to point out that my last post was not aimed at anyone legitimately taking a company to tribunal!

We had someone take us to tribunal and we won, we paid them the necessary notice and leave payments and they bragged locally about the 'payout' they'd been awarded!

Sorry about using my personal experience to cloud my posts in this way!

Part of her complaint was that her progress was blocked.

The company may have actually done that. And if thetes any hint they did taht eb ause she was a woman, it makes sense to pay her off. Usually a bigger pay out is when the company isn't certain they did everything correctly and that a tribunal would be costly for them.

She may say it's embellished. But she doesn't know what conversations or other things have happened, that she doesn't know about. They may believe she could claim sex discrimination and so paid her off. Since there's a lot of sexist behaviour in the corporate world, wouldn't surprise me if they thought she might win.

It means nothing when you’re watching it dwindle every month…..secure income every time for me!

Consider that whatever the rights and wrongs of the issue, the person is leaving suddenly without having secured another job to go to.
That can look strange to future employers. Plus there may be whispered rumours from the ex colleagues, even if just based on the suddenness of leaving (more so if any details are leaked).
All potentially awkward and off-putting to potential other employers in the same industry.
So the money is partially for that risk - of finding it harder to get another job fast.

I worked in accounts for a London media company in the late 1990s. They paid £36k to someone as a “golden hello” when they poached them from another agency, on top of their £120k salary, and then when they realised they didn’t like them they paid them £85k lump sum to get rid of them 6 months later! 😳. I was on £14.5k as an accounts assistant and remember thinking what huge sums of money it all was.

Yes I know people this has happened to.

It also sometimes happen that the company are in the right but do not want to spend time and money fighting something, even if they might win. Kicking up a fuss to try to get a pay out will end up with you getting a reputation in the industry, people aren't stupid.

My DP was given a "golden goodbye" to leave his last job, also under the condition he did not take them to tribunal. He was on about £30k.

She could be on gardening leave, which means she’s unable to work for anyone else for 3-6 months

Yup.

Usually when someone has been discriminated against and they want them to go quietly.

They do, a years salary is common I think. I know my own employer has done this, and know a colleague who recently has got £50k from her employer.
It makes it easier in some cases to get rid of people without risking them trying to go to tribunal ( whether they have a case or not) and having to pay legal fees and a drawn out process.