Exit Strategies - Guidance on the use of Settlement Agreements including Special Severance Payments - V4 10/09/21

Sep 16, 2026

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Exit Strategies guidance for City of York employees sets out how Settlement Agreements (including confidentiality clauses) may be used when employment ends, and clarifies the treatment of Special Severance Payments. The guidance defines key terms such as statutory elements of pay and contractual payments, and links decisions to the Best Value Duty and relevant legal requirements. It distinguishes cases where additional payments are exceptional, requiring due process and value-focused restraint, and outlines when internal or external legal advice should be sought.

LanguageEnglish

CategoryLetters

FormatPDF

Pages19

Reading Time7 min

AccessFree to download

Exit Strategies

Definitions

Reference docs

Introduction

Revision history

Exit Strategies Guidance on the use of Settlement Agreements including Special Severance Payments DOCUMENT INFORMATION & REVISION HISTORY | Title | Exit Strategies -Guidance on the use of Settlement Agreements including Special Severance Payments | | --- | --- | | Contact for Enquiries | Trudy Forster | | Issue No | Issue Date | Author(s) | Nature of Amendment | | --- | --- | --- | --- | | V1 | 12/08/21 | Trudy Forster | Original version written by Trudy Forster Changes made by Sam Healy (Barrister, Dere Street Barristers))– Accepted
Changes Made by GMB – Accepted | | V2 | 17/08/21 | Trudy Forster | Changes made by Internal Audit | | V3 | 19/08/21 | Trudy Forster | Changes made by HR to item 4.4 | | V4 | 10/09/21 | Trudy Forster | Changes made by Trudy Forster , Janie Berry and Debbie Mitchell following A&G Committee feedback
Changes made by Sam Healy (Barrister, Dere Street Barristers)) | This guidance applies to all employees of CYC, including Chief Officers 1. Definitions: | Settlement Agreements –(formerly known as Compromise Agreements) | A legally binding agreement signed by employer and employee resolving a dispute between them, such as the terms on which the employee’s employment is ended. | | --- | --- | | Special Severance Payments | Additional payments made to employees beyond what they are entitled to under their contracts of employment or statutory law. | | Confidentiality Clause (often referred to as non-disclosure agreements or ‘NDAs’) | A clause in a Settlement Agreement that prevents the unauthorised disclosure by the employee of confidential information relating to their employment or its termination. | | Statutory elements of pay | Those elements of pay that the employee is owed as a matter of statutory law applicable to all employees in the UK. For example, the right to be paid for annual leave or the right to receive a minimum amount when made redundant (so-called‘statutory redundancy’) | | Contractual Payments | Those elements of pay that the employee is owed under their contract of employment. For example, the normal remuneration paid for work done. | | Best Value Duty | The best value duty, as set out in section 3 of the Local Government Act 1999 (“the 1999 Act”), provides that "A best value authority must make arrangements to secure continuous improvement in the way in which its functions are exercised, having regard to a combination of economy, efficiency and effectiveness”. The best value duty is relevant to local authority duties to deliver a balanced budget (Part 1 of the Local Government Finance Act 1992), provide statutory services (including adult social care and children’s services) and secure value for money in spending decisions. This will include decisions to make Special Severance Payments. | | Chief Officer | Chief Officer ay City of York Council are all staff on posts at Assistant Director, | | | Director, Corporate Director and Chief Operating Officer | | --- | --- | | Statutory Officers | Head of Paid Service – Chief Operating Officer
Monitoring Officer – Director of Governance
Section 151 Officer – Chief Finance Officer/AD Finance | | Legal Advice | Legal advice may come from within the council where the advice is for non-chief officers
Legal advice will be sought from external independent legal advisers where the payment is for a chief officer. | 2. Reference docs Cabinet Office Guidance on Settlement Agreements, Special Severance Payments on Termination of Employment and Confidentiality Clauses [https://assets.publishing.service.gov.uk/government/uploads/system/uploads/atta](https://assets.publishing.service.gov.uk/government/uploads/system/uploads/atta)[chment_data/file/817156/Cabinet-Office-guidance-on-settlement-agreements-](chment_data/file/817156/Cabinet-Office-guidance-on-settlement-agreements-)[special-severance-payments-on-termination-of-employment-and-confidentiality-](special-severance-payments-on-termination-of-employment-and-confidentia

FAQs

What is a Settlement Agreement in this guidance?

A legally binding agreement signed by employer and employee that resolves a dispute, including the terms on which employment is ended.

What are Special Severance Payments?

Additional payments made beyond what an employee is entitled to under their contract or statutory law.

When should Special Severance Payments be used?

They should be used only in truly exceptional circumstances after following due process, with the amount kept as small as possible to provide value.

Sep 16, 2026

Upload by Rhys