The Employee Termination Release Agreement is a crucial document used in Malaysian employment contexts when formally concluding an employment relationship through mutual agreement. This document is particularly important in scenarios involving voluntary separation schemes, redundancy situations, or negotiated exits. It serves to protect both employer and employee interests by clearly documenting all termination terms, including financial settlements, benefit arrangements, and mutual releases, while ensuring compliance with Malaysian employment laws. The agreement helps prevent future disputes by providing a comprehensive record of the termination arrangement and includes important provisions required under Malaysian legislation regarding statutory benefits, EPF contributions, and notice periods.
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1. Parties: Identification of the employer and employee, including full legal names, addresses, and any relevant registration or identification numbers
2. Background: Brief overview of the employment relationship, including start date, position, and context of the termination
3. Definitions: Key terms used throughout the agreement defined for clarity and legal certainty
4. Termination Date: Clear statement of the effective date of employment termination
5. Final Payment and Benefits: Detailed breakdown of final salary, pro-rated benefits, and statutory payments due to the employee
6. Statutory Termination Benefits: Calculation and payment terms for benefits under the Employment (Termination and Lay-Off Benefits) Regulations 1980
7. Release and Waiver: Mutual release of claims and waiver of rights between parties
8. Company Property: Requirements for return of company property and documents
9. Confidentiality: Ongoing obligations regarding confidential information
10. Tax Matters: Treatment of payments for tax purposes and responsibilities of each party
11. Governing Law: Specification of Malaysian law as governing law and jurisdiction
12. Entire Agreement: Statement that the agreement represents the complete understanding between parties
13. Execution: Signature blocks and execution requirements
1. Non-Disparagement: Mutual obligations not to make negative statements about each other - typically included for senior employees
2. Reference: Terms regarding future employment references - included when agreed as part of the settlement
3. Post-Employment Restrictions: Non-compete and non-solicitation clauses - typically for senior positions or when existing contract contains these provisions
4. Outplacement Services: Details of any career transition support offered - included when such services are part of the package
5. Medical Benefits Extension: Terms for continued medical coverage if offered - typically for long-serving or senior employees
6. Share Options/Awards: Treatment of outstanding share options or awards - needed when employee participates in share schemes
7. Legal Fees: Agreement to pay employee's legal fees for reviewing the agreement - typically for senior employees
8. Announcement: Agreed internal/external communication about the departure - typically for senior roles
1. Schedule 1 - Payment Calculation: Detailed breakdown of all payments including salary, notice pay, statutory termination benefits, and other entitlements
2. Schedule 2 - Benefits Summary: List of all benefits and their treatment post-termination
3. Schedule 3 - Company Property: Itemized list of company property to be returned
4. Appendix A - Statutory Declaration: Standard form statutory declaration confirming receipt of all entitlements and understanding of the agreement
5. Appendix B - Certificate of Service: Standard form employment certificate as required under Malaysian law
6. Appendix C - EPF Forms: Relevant Employees Provident Fund forms for processing final contributions
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