Mutually Agreed Resignation Scheme (MARS) Settlement Agreements
At Solidaire Solicitors, we understand that employment decisions—particularly those involving voluntary exits—require careful thought and legal clarity. One such pathway available to NHS employees is the Mutually Agreed Resignation Scheme (MARS). This blog outlines what MARS is, how it works, and what legal considerations employees should keep in mind before participating.
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What is the MARS Scheme?
The Mutually Agreed Resignation Scheme (MARS) is a voluntary severance programme available within the NHS that allows employees to resign in exchange for a financial payment. It is not a redundancy, dismissal, or retirement scheme. Instead, MARS is designed to help NHS organisations reshape their workforce in a cost-effective and flexible manner.
By offering a financial incentive to resign, the scheme creates opportunities for organisational change—such as redeployment, restructuring, or avoiding compulsory redundancies—while also giving staff a route to leave the NHS on agreed terms.
Key Features of MARS
- acceptance is not guaranteed.
- Mutual Agreement: Both the employee and employer must agree to the resignation terms. There is no obligation for either party to accept the proposal.
- Financial Incentive: A one-off, non-recurrent payment is made to the employee upon resignation. This is typically calculated using a formula based on salary and length of service.
- No Right of Return: Employees who resign under MARS generally cannot be re-employed by the same NHS organisation (or in some cases, the wider NHS) for a specified period, usually six months.
- Not Redundancy: Because it is not a redundancy, statutory redundancy rights or notice periods do not apply.
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Benefits for Employees
- For some NHS employees, MARS may present an opportunity to:
- Explore new career paths or early retirement
- Take a career break with a financial cushion
- Exit a challenging role or environment with dignity and mutual consent
However, it is crucial to weigh these benefits against your long-term career plans, pension implications, and the loss of employment rights.
Legal Considerations: Why Legal Advice Matters
Before agreeing to resign under MARS, it’s strongly advised to seek independent legal advice, as the implications are significant and often irreversible. Key legal points to consider include:
- Contractual Impacts: Review how MARS will affect your existing employment contract and any accrued benefits (e.g., annual leave, sick pay).
- Pension Implications: Leaving the NHS may affect your pension entitlements, especially if you are part of the NHS Pension Scheme.
- Settlement Agreement: Some MARS arrangements may include a formal settlement agreement. This is a legal contract that waives your rights to bring certain claims against your employer.
- Re-Employment Restrictions: Understand the rules regarding rejoining the NHS or public sector. Restrictions may vary between organisations.
At Solidaire Solicitors, we specialise in employment law and can offer bespoke legal advice to help you make an informed decision. Our team ensures you understand the terms, your rights, and the full impact of resigning under MARS.
How We Can Help
Whether you’re considering applying for MARS or have already received an offer, Solidaire Solicitors can:
- Review your proposed MARS agreement
- Explain the legal and financial implications
- Negotiate favourable terms where possible
- Advise on alternative options if MARS is not right for you
Final Thoughts
The NHS MARS scheme can be a valuable tool for both employees and employers—but it’s not a one-size-fits-all solution. It’s essential to approach the process with a full understanding of your rights and responsibilities.
If you’re considering MARS or have questions about your employment status, contact Solidaire Solicitors today. Our experienced employment law team is here to guide you every step of the way.
Frequently Asked Questions
No. MARS is not a redundancy. It is a voluntary resignation scheme with a financial incentive, and you won’t be entitled to statutory redundancy pay or other redundancy rights.
Yes, up until the point that a formal agreement is signed by both parties. Once signed, the resignation is final and binding.
The payment varies by NHS trust and is usually based on a calculation involving your salary and years of service. It is a one-off, non-pensionable payment and may be subject to tax.
Yes, it can. Because it is not retirement, MARS may impact your pension benefits and future accrual. It’s important to seek specialist pension advice before accepting an offer.
Most schemes restrict re-employment within the same NHS organisation for at least six months, and sometimes more broadly across the NHS. Check the specific terms of your trust’s scheme.
Legal advice is not mandatory for MARS, but it is strongly recommended, particularly if you are asked to sign a settlement agreement. Our solicitors can help you fully understand your rights and obligations.
No. MARS is entirely voluntary. You cannot be compelled to apply, and if you do apply, the employer is not obliged to accept your application.
In some cases, an employee might challenge the validity of a settlement agreement if they believe they were coerced or if legal requirements weren’t met. Seeking legal advice before signing is crucial to prevent such situations.
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