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

[BlazingSunsh]

A friend I have got closer to over recent months told me that she fell out with her employer, a law firm, and was paid 70k if she agreed to leave without further fuss. She was on 90k at the time. The dispute was over her workload/what she had been given and how she felt she had been blocked to progress. The company disagreed but wanted her to leave so apparently offered this? I find this totally unbelievable?! 70k with no tax? Do these things happen?! If so I want to try it as that’s basically two years of my entire income after tax!

Not if you’re on garden leave. The point of that is to stop you working elsewhere and taking clients etc.

I don't think that's true, If you are off work from stress or because you are a dog walker who broke his leg being pulled over by a over enthusiastic husky as happened to my dog walker then you are still capable of doing your other job.

My friend got £75k and she has been with the company 2 years. There was some discrimination but they settled out of court.

I got £60k due to redundancy.

It's not unusual

Only the first £30k is tax free. That's why it's common to get £30k as the settlement sum in a compromise agreement. Any amount above that would be taxed, but she could have got more than that - she'd probably have been entitled to pay in lieu of notice, for example.

Err you need to have good grounds for a tribunal claim against your employer, eg for discrimination. This is essentially settlement of a claim - you get the money to go and not make a fuss. If you just don’t like your job, your employer won’t pay you tens of thousands (and for a lower salary, you’d be looking at less than your friend in any event) to leave. It’s literally only if they think you will sue them.
Some contracts for high earners might include an early termination payment too.

No, exactly, our standard templates had 1xyear's salary for settlement, 3xmonths' salary for gardening leave.

We might occasionally offer a bit more if it could really affect the company or one of the execs. I'm in-house, mostly pretty prestigious FTSE100 type companies so not short on capital. If I'd conceded that demand (or even suggested it to the CEO!) it would display a real lack of understanding and ability that could in itself see you given notice...

Just happened to my sister, put on gardening leave whilst she decided if she wanted to take their offer, then paid a lump sum(which she hasn't told me how much she got so yes she's probably signed some agreement) and her unused holiday. She hasn't worked for 2 months so far, and won't need to until December.

It's not fun trying to fill your days when you're used to working 5 days a week. There's only so much housework and exercise you can do.

In all likelihood she was causing problems internally and they were happy to see her go.

I work in a big financial services company. I've seen many people go on unexpected leave and then an announcement comes out saying they've "decided to pursue other opportunities".

It's either because they were trouble makers or they disagreed with the bigwigs on how things were heading.

You also won't get 70k if you "try" this, as you're on much less as an annual salary. You'd more likely get your take home pay.

My friend negotiated settlement with her law firm - £200k (equivalent to one years’ salary), she stays on the website for 6 months and was put on gardening leave for that duration, once she secured a new job she could leave with immediate effect, and they had to give her a positive reference,

It was well deserved though as they treated her horrifically post mat leave (and she only took 5 months mat leave).

Sheesh. She will have been through months of stress with the threat of being sacked over her. And she now has to find a job.

You wouldn’t be saying that if it was court ordered compensation. You would say “How awful for her that this is fair compensation.” Honestly, you have your thinking arse about face here.

Yep. I live with a lawyer and I'm always baffled. The retention bonuses are even more crazy

Of course this happens, but only in specific circumstances where you really want rid of someone, but can't really get to that point via a performance process or want them gone quickly & quietly.

Its not a good thing. In most industries reputations do matter when getting jobs & people manage to hear about these things. You run the risk of not getting a decent job again and its not a pleasant process to go through.

That said, for some people it can be ok. Ive known a couple of people get paid off then sail into another job.

£70k sounds like a lot when you earn less but to large companies its not that much

I think a lot of these settlements were negotiated by great lawyers: I know 3 lawyers who negotiated such settlements for themselves as that’s their job. Otherwise the companies take the piss and try away with offering the least amount possible.

Maybe she was 64?

I know someone who did basically achieve this (mid-fifties, and should have been sacked for incompetence). At the first sign of performance improvement he went off sick and said work left him incapacitated due to stress! He got early retirement and his pension topped up to the level it would be if he had been leaving at 65!

Interestingly, I was last boss but one and approached HR about competence and was told to manage around him. His last boss insisted he be pursued for competence and maybe cost the company more. But regardless it all happened 20 years ago!

Yep, my school (private) paid £30K to a colleague (teacher) who didn't fit in with the new head, so I can quite believe a law firm paying £70K in similar circumstances.

It is more than possible. Especially in Law.

DC had a friend whose father was a specialist commercial lawyer. He was paid off and given two years gardening leave to prevent him working with the competition. That was two million pounds for a two year holiday. They used to visit the friend's mansion and the dad was just milling around, making the vast lawn perfect, working out on his Peloton. I couldn't believe it and was pretty envious. Two years later, he was straight back in, working silly hours as a lawyer elsewhere. I'd have retired, but he is clearly driven and I'm not.

Something that is worth thinking of - usually such agreements are a positive in a bad situation. Sometimes a redundancy (as opposed to a hush payment) comes at a perfect time in someone’s life and the payout is sort of free cash (I’ve known people made redundant while planning to quit, or who got snapped up so fast they negotiated a holiday in between jobs).

Companies often require NDAs and you give up your right to take legal action, lodge complaints. The company is only doing this because it makes business sense for them. The individual at the centre of it might have lengthy (even life long) medical treatment (especially mental health). They might struggle to find work again. Or they might have been underpaid, blocked from pay rises, abused in their workplace etc.

For very senior people it can also be the simple way of changing direction, or having a visible scapegoat for a problem. Lower ranked people are unlikely to get a payout for something like this.

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.

My husbands friend agreed to a similar settlement (albeit a year garden leave), and nearly went mad in the first couple months. In the end he and his wife pulled the kids out of school and went travelling for the year so it worked out - although expensive.

If so I want to try it as that’s basically two years of my entire income after tax!

Maybe you should retrain and get a job with a bonus.

Normal in the corporate world but you have to remember she is now unemployed, probably with no reference and less than a years’ salary in the bank.

OP - this is common in senior roles. I received a settlement of £120k 12 years ago. Part of the agreement was that my employer absorbed most of the tax and it was calculated so any deductions meant I still ended up with the full £120k. This was for the company to avoid a tribunal (and significant reputation risk), as I had documented evidence of serious sexual harassment which they failed to address for months. The settlement was almost triple my annual salary.

What I think you’re missing is most people who get such settlements have gone through a really crappy time to get there. I would rather not have been harassed, ignored and threatened for months, and just got on with the job I was meant to rather than get a massive payout. The process before settling is stressful, expensive and unpredictable. My mental and physical health suffered and even after the settlement it took a long time for me to feel confident and ready to work again. It’s not a pleasant experience at all.

I know of a lower ranked person who got one of these payouts.

She was constantly off sick with made up health problems (I know this, we were friends til she decided I'd betrayed her by having my own issues to handle). Mostly she used poor mental health as the reason but also some physical things with very little evidence, but that don't necessarily have a lot of medical evidence.

Whenever a sick review was done she would threaten ACAS, the union, claim she was being treated unfairly and differently to others (she wasn't).

She would make a fuss every time annual leave was brought up as she always wanted to be off at the busiest leave times (i.e. Christmas) and as there needed to be staff in wasn't always allowed it. I know she wasn't given any less than others but she claimed she was.

We had to work "shifts" to ensure phone cover, and because one other staff members contracted hours predated this arrangement and therefore she didn't have to change them (and actually, she offered to do one of the days no one else wanted to as it suited her, when she could have done none), this woman complained that it was unfair to her that someone else's contract said differently.

In the end they offered her a settlement to allow her to stop working (which is what she wanted) for a year, meaning she had time to sort out something else. But it was essentially so she'd go away.

NHS paid my mum off a significant amount in exchange for her silence when she accidentally discovered malpractice

It’s true. She got paid out under their insurance as being totally permanently unable to work again as a workplace injury. Basically she said she can never work as a lawyer again, so she got all the lost wages for her working life.

Someone in my team got a decent payout recently. It's a bit depressing our employer would rather do that than actually address the issue!!

Yeah happens, friend of ours got 70k to leave his job- he was about to kick up a huge legal fuss and they just wanted rid of him.