The Mutual Termination of Employment agreement is utilized when both employer and employee in the UAE agree to end their employment relationship by mutual consent. This document is essential for compliance with UAE Labor Law (Federal Decree-Law No. 33 of 2021) and ensures a clear record of the agreed termination terms. It typically includes provisions for final settlements, end-of-service gratuity calculations, handover requirements, and mutual releases. The agreement is particularly important in the UAE context where proper documentation of employment termination is crucial for visa cancellation, labor dispute prevention, and maintaining good standing with labor authorities. It provides both parties with legal certainty and helps avoid future disputes by clearly documenting all aspects of the separation.
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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, original employment date, and mutual decision to terminate
3. Definitions: Definitions of key terms used in the agreement, including 'Termination Date', 'Final Settlement', etc.
4. Termination of Employment: Clear statement of mutual agreement to terminate employment and the effective termination date
5. Final Settlement: Detailed breakdown of all payments due, including salary, end-of-service gratuity, and other entitlements
6. Return of Company Property: Requirements for returning company assets, documents, and equipment
7. Release and Waiver: Mutual release from claims and obligations, subject to terms of the agreement
8. Governing Law and Jurisdiction: Confirmation that UAE law governs the agreement and jurisdiction for disputes
1. Non-Disclosure and Confidentiality: Required when there's a need to reinforce or extend confidentiality obligations post-employment
2. Non-Competition and Non-Solicitation: Include if continuing restrictions on employee's future activities are needed
3. Outstanding Leave: Include when there is unused annual leave to be calculated and settled
4. Continuation of Benefits: Required when certain benefits (like medical insurance) will continue for a specified period
5. Reference and Communications: Include when parties want to agree on how future employment references will be handled
6. Immigration Status: Required for expatriate employees to address visa cancellation and residence status
7. Cooperation: Include when ongoing cooperation is needed for handover or future inquiries
1. Schedule 1 - Final Settlement Calculation: Detailed calculation of all financial entitlements including basic salary, end-of-service gratuity, and other benefits
2. Schedule 2 - Company Property Inventory: List of all company property to be returned by the employee
3. Schedule 3 - Outstanding Projects/Handover Notes: Details of work in progress and handover instructions
4. Appendix A - Original Employment Contract: Copy of the original employment contract for reference
5. Appendix B - Employee Clearance Form: Standard UAE ministry-compliant clearance form documenting return of assets and settlement of dues
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