Golden Goodbyes – How Do They Come About?

The Jersey media has recently reported much about the sums paid to certain public officials when their employment contracts have come to an end, in particular the payment to the former Chief Executive of the States of Jersey.

As anyone who has been involved in the drafting of the terms and conditions of a senior company executive, civil servant or high profile sports personality will know, their contracts often include provision for a severance payment in the event that the relationship ends earlier than anticipated. This is known as a severance agreement and will record the terms of the employee's departure and the payments to be made in return for a waiver of any contractual claims. While a severance agreement would thus avoid the employee bringing a claim for wrongful dismissal, it would not cover any potential statutory claims that the employee may have. Statutory claims can only be waived by means of a compromise agreement.