Negotiating an Exit Package

We can help negotiate an exit package where an employment relationship has broken down, a disciplinary or performance process is heading toward dismissal, a restructure has created uncertainty, or both sides can see that continuing the relationship is no longer practical.

The quantum of an exit package varies substantially from case to case. There is no reliable “number of weeks per year of service” formula. The real question is leverage: what legal, factual and commercial risk does each side face if agreement is not reached?

What can affect the value of an exit package?

Factors commonly include:

• Duration of employment and the employee's history with the business.
• Notice period, accrued entitlements and contractual benefits.
• The nature of the job and the realistic time required to secure comparable employment.
• The employer's motivation to secure a clean, confidential and certain departure.
• Litigation risk, particularly where there are legitimate personal grievances, process defects, wage claims or other employment claims.
• The strength of the evidence and weaknesses on both sides.
• Whether the employee is still employed and what process the employer would need to complete if there is no settlement.

An exit package is not just the headline dollar figure

A good settlement can deal with:

Separate minimum entitlements from settlement money

Wages, holiday pay and other minimum legal entitlements should not be casually rolled into a single mystery number. A settlement should distinguish what is already owed from the additional consideration being paid to resolve the dispute. Minimum entitlements cannot simply be signed away through an employment record of settlement.

Where the leverage comes from

The strongest exit negotiations are grounded in a proper assessment of the underlying employment position. If the employer is running a defective disciplinary, performance or redundancy process, that may create real risk. If the employer has a strong lawful position, that matters too. We assess both sides before putting a number or proposal forward.

When we become involved, the objective is to improve the quality of the negotiation: fewer emotional exchanges, clearer issues, realistic terms and a written agreement that actually deals with what happens next.

“Without prejudice” does not mean magic words

Settlement discussions need to be handled carefully. Simply typing “without prejudice” at the top of an ordinary employment email does not automatically make everything in it privileged. The context and existence of a dispute matter. We avoid mixing unnecessary factual admissions with settlement proposals.

Record of Settlement

Where agreement is reached, employment settlements are commonly formalised as a Record of Settlement signed by the parties and Employment Mediation Services. Once properly signed, the settlement is generally final, binding and enforceable. That finality is useful — but it also means the wording should be right before the document is signed.

Terms that deserve particular attention

• Reference: agree the actual wording or a clear process, not a vague promise that somebody will “provide a reference”.
• Reason for leaving: make sure the internal and external description of departure does not sabotage future employment.
• Confidentiality: understand exactly what can and cannot be said and to whom.
• Non-disparagement: consider whether it is mutual and practical.
• Restraints: do not accidentally strengthen an old restraint as part of the exit.
• Payment: identify amounts, due dates and what happens if payment is late.
• Release: understand which claims are being settled on a full-and-final basis.

Common mistakes to avoid

• Resigning in anger before obtaining advice.
• Accepting the first verbal number without seeing all terms.
• Focusing on money while ignoring reference, restraint or confidentiality wording.
• Signing a broad full-and-final settlement without understanding the release.
• Letting an artificially short deadline create panic.
• Negotiating directly after appointing a representative and creating inconsistent positions.
• Posting about the dispute publicly while asking for a confidential settlement.

If you want to stay employed

An exit package is an option, not an assumption. If your objective is to keep your job, tell us. We can focus on defending the disciplinary or performance process, improving consultation, or preserving your position rather than negotiating your departure.

Frequently asked questions

How much should an exit package be?

There is no universal formula. The value depends on legal risk, evidence, notice and entitlements, employability, the employer's objectives, and the practical alternatives if no agreement is reached.

Should I resign before asking for an exit package?

Usually that is dangerous. Resignation can remove leverage or change the legal character of the dispute. Get the strategy sorted first.

Can I change my mind after signing a Record of Settlement?

A properly signed employment Record of Settlement is generally final and binding. That is why the terms need to be understood before signing.

General information only — settlement value and terms depend on the individual employment dispute.