The Employment Termination Agreement is a crucial document used in Hong Kong employment relationships when formalizing the end of employment between an employer and employee. It is typically used in both mutual separation scenarios and unilateral terminations where parties agree to documented terms. The agreement must comply with Hong Kong's Employment Ordinance and related employment legislation, addressing mandatory requirements such as statutory payments, notice periods, and leave entitlements. This document serves multiple purposes: it provides legal certainty, prevents future disputes, ensures proper handling of confidential information, and documents any post-employment obligations. The agreement can be customized to include various elements such as additional payments, benefits continuation, or restrictive covenants, while ensuring all terms remain compliant with Hong Kong employment law.
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1. Parties: Identification of the employer and employee, including full legal names and addresses
2. Background: Brief recital of the employment relationship, including start date and current position
3. Definitions: Key terms used throughout the agreement
4. Termination Date: Clear specification of the last day of employment
5. Final Payment: Details of salary, unused annual leave, and other entitlements up to the termination date
6. Statutory Payments: Coverage of mandatory payments such as severance pay or long service payment if applicable
7. Company Property: Requirements for return of company property and documents
8. Confidentiality: Ongoing obligations regarding confidential information
9. Release and Waiver: Mutual release of claims between parties
10. Tax Implications: Statement regarding tax treatment of payments
11. Entire Agreement: Clause stating this document represents the complete agreement between parties
12. Governing Law: Specification that Hong Kong law governs the agreement
1. Garden Leave: Applicable if employee is placed on garden leave during notice period
2. Non-Compete and Non-Solicitation: Include if post-termination restrictions are required
3. Reference: Terms regarding the provision of employment references
4. Outplacement Support: Include if company is providing career transition services
5. Special Bonus: Used when additional termination or discretionary bonuses are offered
6. Share Options/Awards: Treatment of outstanding equity compensation
7. Medical Benefits Extension: If post-termination medical coverage is provided
8. Legal Fees: Include if employer is contributing to employee's legal costs
9. Announcement: Terms regarding internal/external communication of departure
1. Schedule 1 - Payment Calculation: Detailed breakdown of all payments including statutory entitlements
2. Schedule 2 - Company Property: Itemized list of company property to be returned
3. Schedule 3 - Outstanding Equity Awards: Details of share options/awards and their treatment
4. Appendix A - Form of Release: Standard form of release to be signed on termination date
5. Appendix B - Reference Letter: Agreed form of reference letter if applicable
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