Termination payments

Q. A member has been on long-term sick leave with work-related stress. By agreeing with the employer to have her employment terminated, she is adamant that she will be able to move on and her health will improve. Reluctantly we are prepared to accept her decision, but what would be a good financial package to negotiate for her exit?

A. If you are satisfied that she is capable, given the state of her health, to make the decision that it is in her best interests that she go, then a termination payment comprises a number of elements. There is: paid notice (plus the value of benefits, such as employer pension contributions during that period) accrued but untaken holiday, a sum for her loss of long-service rights (£300) and a sum to reflect her ongoing loss of earnings.

Given that she is still ill and has a significant amount of sick leave on her personnel record, she may find it difficult to be ready for/to find, alternative work.

Taking into account her ability to start/secure alternative work, if she were to successfully bring a tribunal claim, she might recover loss of earnings for approximately a six-month period. Therefore, the financial part of the package — again, depending on the strength of her case — that you might want to recommend, could be around the nine months’ salary mark.