The Mutual Termination of Employment Letter is a crucial document used in Hong Kong when both employer and employee agree to end their employment relationship by mutual consent. It provides a formal framework for documenting the termination arrangement, ensuring compliance with Hong Kong employment laws, particularly the Employment Ordinance (Cap. 57). This document is typically used when parties wish to end the employment relationship amicably and on mutually agreed terms, rather than through unilateral termination. The letter includes essential details such as the termination date, final payment calculations, benefit arrangements, and any post-employment obligations. It serves as a legal record of the agreement and helps prevent future disputes by clearly documenting the terms of separation.
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1. Letterhead and Date: Company letterhead, date, and reference number if applicable
2. Addressee Details: Employee's full name and address
3. Subject Line: Clear indication that this is a mutual termination of employment
4. Employment Details Reference: Reference to current position and employment start date
5. Mutual Agreement Statement: Clear statement that both parties agree to terminate the employment
6. Termination Date: Specific date when the employment will end
7. Final Payment Details: Overview of salary, unused leave, and other statutory entitlements
8. Company Property: Requirements for returning company property
9. Full and Final Settlement: Statement confirming this represents full and final settlement
10. Acknowledgment and Signature: Space for both employer and employee signatures
1. Confidentiality Reminder: Include when there are specific confidentiality obligations that continue post-employment
2. Non-Compete Reminder: Include when there are post-employment restrictions that will continue to apply
3. Reference Provision: Include when agreeing to provide employment references
4. Medical Benefits Extension: Include if there's an agreement to extend medical benefits beyond termination
5. Outstanding Bonus/Commission: Include when there are outstanding variable payments to be addressed
6. Release Clause: Include when there's a need for mutual release of claims
7. Legal Advice Statement: Include when the employee has been advised to seek independent legal advice
1. Final Payment Breakdown: Detailed calculation of all final payments including salary, leave, statutory payments
2. Company Property List: Itemized list of company property to be returned
3. Benefits Summary: Summary of any benefits that will continue or terminate
4. MPF Arrangement Details: Details of MPF account arrangement and final contributions
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