The NHS Mutually Agreed Resignation Scheme (MARS) offers NHS staff the opportunity to leave their role voluntarily in exchange for a financial payment. While the scheme can provide a positive pathway for those seeking a change in career, early retirement, or relief from the demands of NHS work, it is essential to understand the legal implications before applying. Seeking advice from a solicitor experienced in NHS MARS agreements will help ensure that you are fully informed and your best interests are protected.
What is the MARS Scheme?
The Mutually Agreed Resignation Scheme is a voluntary process whereby the employee applies to resign from their role in return for a financial settlement, subject to the employer's agreement. It is not the same as redundancy or dismissal. If approved, the employee receives a financial payment, which is typically calculated based on length of service and salary. The NHS Trust benefits from being able to manage workforce costs without resorting to compulsory redundancy.
There is no entitlement to MARS, and approval of an application is entirely at the discretion of the employer. Each Trust will assess applications based on its operational needs, financial position, and service delivery plans.
Key Considerations for NHS Employees
The payment offered under the MARS scheme is usually calculated based on years of continuous NHS service and current pay level. However, the formula and the amount can vary between NHS Trusts. It is important to compare the payment with what you might otherwise receive through redundancy or early retirement options. MARS payments may be subject to tax, though in some cases part of the payment may be tax-free if it qualifies under the exemption for termination payments. It is strongly recommended that you seek financial advice to understand the tax position before signing any agreement.
Leaving under MARS may also affect your NHS pension. Depending on your pension scheme membership and retirement age, you may not be eligible to access your pension immediately, or you may face actuarial reductions. This is especially important for members of the 1995, 2008, or 2015 sections of the NHS Pension Scheme. Before applying, consult with NHS Pensions or an independent financial adviser to understand how your benefits will be affected.
In some cases, NHS employers impose restrictions on re-employment following a MARS departure. This can range from six months to twelve months, during which time you may not be eligible to take up another NHS role, even in a different Trust within the same Integrated Care System. This is designed to ensure that the scheme is not used as a means to exit and re-enter NHS employment on more favourable terms. You should always check your Trust’s local MARS policy for specific restrictions.
By applying for MARS, you are resigning from your post voluntarily. This means you are not being dismissed and will not be entitled to statutory redundancy pay or have the right to bring a claim for unfair dismissal. In many cases, you may be asked to sign a settlement agreement as part of the process. A settlement agreement is a legally binding contract that waives your right to bring most employment-related claims, including claims for unfair dismissal or discrimination. For such a waiver to be legally effective under section 203 of the Employment Rights Act 1996, you must receive independent legal advice from a qualified solicitor.
Why Seek Legal Advice from a MARS Solicitor?
Although MARS is a voluntary resignation, it can have wide-ranging consequences for your legal and financial position. A solicitor can review the terms of your settlement, ensure that the agreement is legally compliant, and explain in plain language what rights you are giving up. They can assess whether the financial offer is reasonable, taking into account your length of service, potential pension impact, and the tax position of the payment. In some cases, a solicitor may be able to negotiate improved terms on your behalf, for example, if there is ambiguity around holiday pay, notice entitlement, or accrued benefits.
Importantly, many NHS Trusts contribute to the cost of independent legal advice, particularly if a settlement agreement is being signed. This means you can usually obtain expert legal support with little or no cost to yourself.
How Pre-Law Can Help
We provide fixed-fee legal advice that is clear, practical, and tailored to your situation. We will review your settlement agreement, explain your options and entitlements, and ensure that you understand the full implications of accepting a MARS offer. For more information, please contact us on 01524 907100, info@pre-law.co.uk or through our online enquiry form.
