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I am speaking in the sense of employment contract, but I believe the same scenario is applicable to all kinds of contracts.

The employer exercises their power to terminate Alice, and pay in lieu of notice as required by law (and also contract). Employer and Employee signed a document stating the above.

However a few days later, the employer changed his mind and decided that it is a summary dismissal, and he will not pay in lieu of notice (as it is not required by law and employment contract).

Let's assume for academic purpose we can not argue from the point of waiver by election/waiver by estoppel, and the legality of summary dismissal itself.

What I want to ask is

  1. Can the employer switch from termination to summary dismissal? (which I believe is yes, as most judgement I see only argues employer cannot go back in his word because of waiver)

  2. Is the termination document a binding contract, especially considering

    a. Does it have a consideration, i.e. can the termination itself be a consideration?

    b. Does it constitute an agreement, as employee cannot actually refuse it?

  3. My ultimate goal is actually only to get the payment in lieu of notice, are there any other way to do that, other than argue on the legality of summary dismissal / waiver?

In general, is there any way to protect termination of contract, if termination itself is not binding? I am sure I miss something as I cannot believe the world works like that.

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  • In the UK: I can remember an employment lawyer explaining such a contract to me, telling me she found no reason not to sign it, and then telling me "If you sign here, in front of me, then the contract is 100% binding and there is no way to get out of it, either for you, or for the company". Now employment law is different in different countries, but Elon Musk just spent 44bn dollars that he didn't want to spend because he signed a contract.
    – gnasher729
    Commented Nov 29, 2022 at 17:02

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The signed document is almost certainly a contract

See What is a contract and what is required for them to be valid?

It contains all the required elements:

  • Intention to create legal relations. There is no doubt that the parties intended that this agreement would end their previous employment contract.
  • Agreement. Obviously.
  • Consideration. By making this particular agreement both parties are giving up rights that they had under the employment contract and at law, that is sufficuient consideration.
  • Legal Capacity. Assuming they had capacity to enter the original employment contract they probably have it now. Unless one of them was drunk. Or insane.
  • Genuine Consent. There is no information given that suggests this wasn’t a genuine agreement.
  • Legality of Objects. It’s not illegal to terminate employment.
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  • So signing termination agreement itself actually matters, rather than being kicked out of office without any signed document (which employer still had to pay in lieu of notice). In later case, it is easier for the employer to go back in his words and go for summary dismissal. \ I guess I was confused by the protection in employment law, as in other contract, it usually require a contract to terminate, as there is no statue protection.
    – Ricky Ng
    Commented Nov 30, 2022 at 1:36

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