I have an infantry battalion that has been charged by infantry in front and flank. It went from zero hits to 5. The supporting unit behind it has been forced to retreat (4 hits) and the artillery battery beside it has also been Done For.
If the battalion in question flees back, it will be contacted by the grenadiers as they advance.
I'm not aware of any surrender rules. Units that suffer more than four hits are simply "Done For."
"Done For" units rout one normal move. Rout and retreat units are made in the sector opposite that from which casualties were last received. "Done For" units are removed from the table in the Rally Phase. If they meet enemy that can't be avoided when they are retreating or routing, they are removed immediately.
I've always understood that "Done For" is a 'catch-all' condition for destroyed, ran from the field or surrendered.
Suppose you could introduce a house rule for surrendering units. If so, who is going to escort the prisoners from the field? If you decide that the victorious unit will provide the escort, do you split it into two small units (one stays on the field, the other marches off with the PoWs)? This will take time to organise - so how long will it take and is it possible with enemy units in close proximity? Can the PoWs be liberated before they get off the field? Personally, I say, "forget it" and get on with the game.
[Btw, where are "the Grenadiers" advancing from (noted you said the unit was charged in the front and flank but not by whom) and are they enemy?]
I would assume that units could be captured if there clearly is no way to retreat. For example if attacked in front and rear. Than there is no space to flee. Than you may took the unit out of the game. Maybe it's a better idea to allow the enemy always to flee (not attack them in front and rear) because these units can still inflict hits on their comrades.
I think that surrender and dealing with pow is better for skirmish-games like Very Civile Actions by The Perfect Captain.
(I created a previous response, but it doesn't seem to have "taken")
In response to Westmarcher's question, the unit (a French infantry battalion) was charged in front by a British infantry battalion, who approached firing. A combined grenadier battalion had been sent through the woods that were "protecting" the French left flank. The grenadiers took a long time to get through the woods, but then arrived just on time and charged out into the enemy's flank.
I ask about surrender because this battle is part of a campaign. The strategic end of the campaign is worked on a boardgame called Frederick the Great. The strategic counters represent leaders and "strength points." When converted to the wargames table, each strength point is 100 points. Infantry are worth 1 point each, cavalry 2 points and an artillery battery 10 points. When a battle takes place, you form your armies by choosing the equivalent units by points.
At the end of a battle, you get to determine how many strength points you have left by the state of morale of your individual units. If a unit survives with morale intact until the end of the battle, you get full points for it on the strategic map. If it suffers a loss of morale (Done For,) then you only get half points. If it is required to surrender, you get no points at all.
So I presume I'll have to make up my own house rule regarding surrender.