What is a Mutually Agreed Resignation Scheme (MARS)?
Sometimes, acronyms can be more confusing than helpful. Has your employer asked you to consider a MARS? If they have, it is unlikely they are referring to a chocolate bar, or a trip to another planet. To find out what a MARS is in Employment Law, read this blog.
What Does MARS Mean?
MARS is an abbreviation for Mutually Agreed Resignation Scheme.
It is a voluntary severance scheme some employers (often Public Sector) offer employees from time to time. The scheme is designed to offer flexibility to employers when faced with certain circumstances, for example, financial problems or the need to restructure the workforce.
The idea is that in exchange for voluntarily resigning your employment and agreeing not to pursue any claims against your employer, you will receive a severance payment. Your employer should inform you how they will calculate your severance payment, should you choose to apply to the MARS.
Can My Employer Make Me Apply To The MARS?
No, as the name suggests, both parties must consent to enter into such an agreement. It is your decision whether or not you apply to the Scheme.
If you have been considering leaving your role, or retiring, a MARS could be beneficial as you will receive a lump sum payment for leaving your job.
If you do not want to leave your employment, you do not have to apply to the Scheme. Your employment will simply continue as normal.
My Employer Has Offered A MARS, What Do I Do Now?
When advising employees of a MARS being launched, your employer will likely outline whether there is any eligibility criteria, for example, they may only be offering a MARS to a certain department, or people on particular contracts.
In addition, your employer should inform you what payment you would receive, if your application was successful. Payments are usually calculated with reference to a formula of your usual pay and length of service with your employer.
Once you know you are eligible and you have decided you want to leave your employment, you can apply to your employer’s MARS. Your employer may have circulated an application form to complete, or they may accept a simple email. It is best to check what form your application needs to take before going any further.
Next, your employer will consider your application. If they accept your application, you will be given a MARS Agreement containing the terms on which you are resigning your employment. This usually comes in the form of a Settlement Agreement.
If they refuse your application, your employment will continue as if you never applied to the Scheme.
What Do I Do With My MARS Settlement Agreement?
Once you have been given a MARS Settlement Agreement, you will then need to obtain legal advice on the terms of your settlement. This is usually done at an appointment with an Employment Solicitor.
During the appointment, your Employment Solicitor should go through the Settlement Agreement with you and explain how the terms will affect you. Essentially, by signing the Settlement Agreement, you will be leaving your employment and giving up your ability to pursue any claims against your employer. In exchange, within the terms of your Settlement Agreement your employer will be paying you compensation. It is, therefore, important to be sure you are getting the right deal for you and you are happy with the terms of your Settlement Agreement.
If you are not happy with the terms of the MARS Settlement Agreement, you have two options:
- Refuse to sign. Your employment will simply continue as if the MARS Settlement Agreement was never an option; or
- Negotiate amendments to the Settlement Agreement.
Do I Have To Pay For Legal Advice For My MARS Settlement Agreement?
Usually, your employer will make a contribution to the costs of obtaining legal advice and signing the Settlement Agreement. The contribution should be outlined in the Settlement Agreement itself, making the employer’s responsibility for the cost of your legal advice a term of the agreement. It is always best to check the contribution set out in the Settlement Agreement will cover the cost of receiving legal advice so there will be no additional cost to you.
What is the Difference Between MARS, Voluntary Redundancy and Compulsory Redundancy?
A MARS can be offered by your employer at any time. They are sometimes used in redundancy situations and can be used instead of, or as well as, a request for voluntary redundancies. However, there is no need for there to be a redundancy situation for a MARS to be offered.
In contrast, for voluntary or compulsory redundancies, your employer will need to identify a redundancy situation exits. Usually, they will begin a redundancy consultation process with some or all staff who will be affected. Having identified those staff who will be affected, they should then encourage any employees who wish to volunteer for redundancy to do so. The intention being, of course, that if the necessary reduction in staffing can be achieved through volunteers, there will be no need to make any employee compulsorily redundant. If there are not sufficient volunteers, the employer will then have to go through their redundancy consultation process to select and issue notice of redundancy to staff. This is the compulsory process.
Do All Employers Offer MARS?
There are only certain employers who have such a formal scheme, usually limited to public sector employees.
Can I Ask My Employer For A MARS?
If your employer has not offered a MARS, then, of course you cannot apply. However, if you do want to leave your employment, there is nothing to stop you initiating negotiations with your employer on an individual basis even if there is no formal scheme. However, please be careful that you take legal advice before doing so as you could put your employment at risk if you are not careful.
Lincs Law Employment Solicitors Can Help You
If you have been presented with a MARS Settlement Agreement, please contact us on 01522 440512 and we would be happy to arrange an appointment to go through your agreement with you. Alternatively, for more information about Settlement Agreements generally, please visit our website at: https://lincslaw.co.uk/services/settlement-agreement/
Managing Director, Specialist Employment Solicitor
Lincs Law Employment Solicitors
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