Senior Leadership Termination and Severance: What Every HR Leader and Executive Needs to Know About Contracts, Appeals and Exit Negotiations
In the first part of this blog series, I focused on the individual experience of unexpected unemployment and introduced the SARAH model as a way to process job loss.
In the second part, I addressed employers and leaders: fair redundancy selection criteria, performance management risks and the legal responsibility to follow proper redundancy processes.
This final article looks at what happens when termination becomes more complex – when policies, appeals, managerial contracts and severance negotiations enter the picture.
Redundancy Policy and Internal Process: Why Clarity Matters
One of the most positive developments in recent years, particularly after COVID-19 and the economic impact of the war in Ukraine, has been the improvement of internal redundancy policies.
Many organisations now have a written redundancy policy that clearly explains:
- The redundancy process step by step
- The selection criteria applied
- The consultation timeline
- The notice period
- The redundancy compensation calculation
- Final salary payments
- Bonus treatment
- Medical coverage continuation
- Return of company property
- The appeal process
Even in countries where employment legislation is clear, employees are rarely familiar with the legal detail. A transparent internal redundancy policy reduces confusion, protects the employer brand and supports fairness.
Clarity reduces conflict.
Before You File an Employment Tribunal Claim
When former colleagues contact me in anger, wanting to take the company to court, the first step is always the same:
- Was the termination lawful under local employment law?
- Was the company’s own redundancy policy followed?
- Were consultation and appeal rights respected?
In many countries, including the UK and most Nordic countries, employees are expected to attempt internal resolution before filing an employment tribunal claim.
My recommendation is always to:
- Use the internal grievance or appeal process first.
- Request written clarification of the termination reason.
- Seek dialogue before litigation.
A well-designed redundancy policy should clearly explain how to appeal, who handles the appeal and within what timeframe it must be submitted.
From an employer perspective, a clearly structured appeal process is good risk management.
When a Manager and Senior Leader Is Terminated
Managerial and senior leadership contracts differ significantly from standard employment contracts.
With higher salary, benefits and decision-making power comes different legal protection.
Managerial contracts typically:
- Define specific termination clauses
- Outline notice periods
- Specify severance calculation methods
- Allow termination without the same level of protection as non-managerial roles
If termination terms are not clearly stated in the contract, that is a risk at signing stage.
When advising senior leaders, my first question is always: What does the contract say?
If the employer is following the contractual terms, there may be limited grounds for legal challenge, even if the termination feels personal.
In constructive dismissal cases, the burden of proof remains with the employee.
Golden Handshakes and Severance Negotiations
In senior-level terminations, discussions often turn to severance packages, so-called golden handshakes and non-disclosure agreements.
In most jurisdictions, severance amounts for senior leaders are not strictly regulated by law. They are often:
- Internally decided
- Based on precedent cases
- Advised by company lawyers
- Designed to minimise litigation risk
The reality is that the less clear the termination reasoning, the higher the negotiated compensation may become.
This may feel unfair, but it is common practice.
However, expectations must remain realistic. Demanding more than what a court would likely award rarely leads to successful negotiation.
Understanding the legal ceiling within the relevant jurisdiction is critical before entering compensation discussions.
What Do You Actually Want?
In termination situations, clarity about objectives matters.
Do you want reinstatement? Do you want financial compensation? Do you want a clean exit and a strong reference?
If reinstatement is the goal, a formal written appeal should:
- Clearly state the reasons for disagreement
- Request clarification of the original decision
- Reference relevant policy or legal grounds
If compensation is the objective, negotiation strategy depends heavily on whether the situation involves:
- Large-scale redundancy (standardised compensation model), or
- Individual termination (negotiable terms)
In large-scale redundancy processes, compensation is normally equal and cannot be increased for individuals.
In individual managerial terminations, compensation is often negotiable.
Most Leaders Lose Their Job at Least Once
The reality is that most professionals lose their job at least two to three times during their career. The higher the responsibility and compensation level, the more likely it becomes.
Many successful CEOs and senior executives have experienced redundancy, dismissal or forced exit due to restructuring or mergers.
Job loss is not a permanent label of failure.
Often, it is a transition point.
Those who have experienced unexpected termination frequently develop stronger leadership empathy and more responsible people management practices.
Experience builds perspective.
Do Not Forget the Reference
During termination discussions, especially when emotions run high, one critical element is often overlooked: the reference.
What will be recorded as the reason for leaving?
In many industries and countries, a positive reference or work certificate is essential for future employment.
In redundancy cases, requesting a detailed work certificate that includes role description, responsibilities and performance commentary is advisable.
In negotiated exits, the wording of the reference and employment record should form part of the separation agreement.
Compensation matters. Reputation matters more.
Final Reflection
Employment termination is rarely entirely personal, even when it feels that way.
If the termination reveals organisational values or leadership behaviours that you fundamentally disagree with, ask yourself whether reinstatement is truly the right objective.
If not, negotiate fairly, secure a clear reference and move forward.
Job loss can be devastating, especially when financial responsibilities are heavy. A fair severance package provides stability. A strong network provides opportunity.
And leadership responsibility remains constant: transparent processes, fair treatment and credible communication protect both people and business.
What to discuss more? 📲 +358505497968 / 📨pirki@vireadvisors.ai /🕝 https://lnkd.in/dJfbwZpJ
