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Mutual Separation Agreement Employment for Malaysia

Mutual Separation Agreement Employment Template for Malaysia

This document is a Mutual Separation Agreement governed by Malaysian law, designed to formalize the consensual termination of employment between an employer and employee. It outlines the terms and conditions of the separation, including financial settlements, benefits, ongoing obligations, and mutual releases. The agreement complies with Malaysian employment legislation, including the Employment Act 1955 and Industrial Relations Act 1967, while providing comprehensive protection for both parties' interests. It addresses key aspects such as separation payments, confidentiality obligations, tax implications, and the return of company property.

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Mutual Separation Agreement Employment

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What is a Mutual Separation Agreement Employment?

The Mutual Separation Agreement Employment is a critical document used in Malaysian employment contexts when an employer and employee mutually agree to terminate their employment relationship. This agreement is particularly relevant during organizational restructuring, role redundancies, or when both parties seek an amicable end to the employment relationship. It provides a clear framework for separation terms while ensuring compliance with Malaysian employment laws, including the Employment Act 1955 and Industrial Relations Act 1967. The document typically includes provisions for separation payments, final benefits, confidentiality obligations, and mutual releases, offering legal protection to both parties while facilitating a smooth transition. It's especially useful in situations where organizations want to maintain goodwill while managing workforce changes effectively.

What sections should be included in a Mutual Separation Agreement Employment?

1. Parties: Identification of the employer and employee, including registration/identification numbers and addresses

2. Background: Brief history of employment relationship and mutual decision to separate

3. Definitions: Key terms used throughout the agreement

4. Effective Date of Separation: Specific date when employment relationship will end

5. Final Payment and Benefits: Details of salary, benefits, and other compensation due up to separation date

6. Separation Payment: Amount and terms of any additional payment as part of the separation package

7. Employee's Obligations: Return of company property, handover requirements, and final duties

8. Confidentiality: Ongoing obligations regarding company confidential information

9. Release and Waiver: Mutual release from claims and liabilities

10. Tax Implications: Statement on tax treatment of payments and responsibilities

11. Governing Law: Specification of Malaysian law as governing law

What sections are optional to include in a Mutual Separation Agreement Employment?

1. Non-Compete Clause: Restrictions on future employment - typically for senior positions or sensitive roles

2. Non-Solicitation: Restrictions on approaching company clients or employees - used for client-facing roles

3. Intellectual Property Rights: Specific provisions for roles involving creation of IP or access to company IP

4. Reference Letter: Terms regarding provision of employment references

5. Medical Benefits Extension: Continuation of medical benefits post-separation if applicable

6. Share Options/Awards: Treatment of outstanding share options or awards for employees in share schemes

7. Legal Fees: Agreement on payment of legal fees for agreement review

8. Outplacement Support: Details of any career transition support provided

What schedules should be included in a Mutual Separation Agreement Employment?

1. Schedule 1 - Separation Payment Calculation: Detailed breakdown of separation payment components

2. Schedule 2 - Outstanding Benefits: List of accrued benefits, leave, and other entitlements

3. Schedule 3 - Company Property: Inventory of company property to be returned

4. Appendix A - Handover Checklist: Detailed list of handover tasks and responsibilities

5. Appendix B - Release Form: Formal release and waiver document

6. Appendix C - Tax Declaration: Statement for tax purposes regarding nature of payments

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Malaysia

Cost

Free to use
Relevant legal definitions






















Clauses


























Relevant Industries

Banking and Financial Services

Technology

Manufacturing

Professional Services

Retail

Healthcare

Education

Telecommunications

Construction

Energy

Transportation and Logistics

Real Estate

Media and Entertainment

Agriculture

Mining and Resources

Relevant Teams

Human Resources

Legal

Finance

Operations

Sales

Marketing

Information Technology

Research and Development

Administration

Customer Service

Production

Quality Assurance

Supply Chain

Business Development

Corporate Communications

Relevant Roles

Chief Executive Officer

Managing Director

Department Head

Senior Manager

Manager

Executive

Senior Engineer

Professional Staff

Administrative Staff

Sales Representative

Technical Specialist

Department Supervisor

Project Manager

Research Scientist

Operations Manager

Finance Controller

HR Manager

Marketing Director

Business Development Manager

Regional Manager

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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