The Compensation Settlement Agreement is a crucial document used in the United Arab Emirates when an employer and employee need to formalize the terms of a settlement, typically arising from employment termination or workplace disputes. This document must strictly comply with UAE Federal Law No. 8 of 1980 and its amendments, including recent updates to the labor law. It encompasses detailed calculations of settlements, including end-of-service benefits, outstanding salary, leave balance, and any additional compensatory amounts agreed upon by the parties. The agreement serves as a legally binding document that, once signed, prevents either party from making further claims related to the employment relationship. It must be drafted in Arabic (with English translation) and often requires registration with or notification to the Ministry of Human Resources and Emiratisation (MOHRE) for full legal effect.
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1. Parties: Identification of the employer and employee, including all relevant registration/license numbers and Emirates ID details
2. Background: Brief description of the employment relationship, reason for termination/dispute, and context for the settlement
3. Definitions: Key terms used in the agreement including 'Settlement Amount', 'Effective Date', and 'Claims'
4. Settlement Amount: Clear statement of the total settlement amount and what it comprises
5. Payment Terms: Details of how and when the settlement amount will be paid, including bank account details
6. Tax and Other Deductions: Statement regarding any applicable deductions, taxes, or governmental fees
7. Release of Claims: Mutual release of all claims related to the employment relationship
8. Acknowledgment: Employee's acknowledgment of receiving all entitlements and understanding the agreement
9. Governing Law and Jurisdiction: Specification of UAE law as governing law and UAE courts' jurisdiction
10. Language: Specification that Arabic is the official language with English translation provided
1. Confidentiality: Required when parties wish to keep the settlement terms confidential
2. Non-Disparagement: Include when parties want to prevent negative statements about each other
3. Ongoing Obligations: Needed when certain obligations continue post-settlement (e.g., confidentiality of trade secrets)
4. Return of Company Property: Include when employee needs to return specific company items
5. Immigration Status: Required for expatriate employees regarding visa cancellation and status
6. Reference Letter: Include when agreement includes provision of employment reference
7. Non-Compete/Non-Solicitation: Include when enforcing post-employment restrictions
1. Schedule 1 - Settlement Calculation: Detailed breakdown of settlement amount including salary, end of service gratuity, leave balance, etc.
2. Schedule 2 - Payment Schedule: If payment is in installments, detailed payment dates and amounts
3. Schedule 3 - Employee Benefits Statement: Statement of all benefits and entitlements being settled
4. Appendix A - Supporting Documents: Copies of relevant documents like employment contract, warning letters, or correspondence
5. Appendix B - Release Form: Standard MOL (Ministry of Labor) release form in Arabic and English
Relevant legal definitions
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Relevant Industries
Banking & Financial Services
Construction & Real Estate
Technology & Telecommunications
Oil & Gas
Retail & Consumer Goods
Healthcare
Education
Manufacturing
Professional Services
Hospitality & Tourism
Transportation & Logistics
Media & Entertainment
Relevant Teams
Human Resources
Legal
Compliance
Employee Relations
Compensation & Benefits
Executive Leadership
Finance
Labor Relations
Relevant Roles
HR Manager
Legal Counsel
HR Director
Compliance Officer
Employee Relations Manager
Chief Legal Officer
HR Business Partner
Compensation & Benefits Manager
Labor Relations Specialist
General Counsel
HR Operations Manager
Chief Human Resources Officer
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