Mutual Separation Agreement for United Arab Emirates

Mutual Separation Agreement Template for United Arab Emirates

A Mutual Separation Agreement under UAE law is a formal document that outlines the terms and conditions for the consensual termination of employment between an employer and employee. The agreement, governed by UAE Labor Law (Federal Decree-Law No. 33 of 2021), details the final settlement terms, including end-of-service benefits, notice period arrangements, and ongoing obligations. It provides legal protection for both parties by clearly documenting the separation terms and including mutual releases of claims, while ensuring compliance with UAE employment regulations and MOHRE requirements.

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What is a Mutual Separation Agreement?

The Mutual Separation Agreement is used when an employer and employee in the UAE mutually agree to end their employment relationship on agreed terms. This document is particularly important in the UAE context as it must comply with Federal Decree-Law No. 33 of 2021 (UAE Labor Law) and relevant MOHRE regulations. It is commonly used during corporate restructuring, when parties wish to end employment amicably, or when negotiating an early release from contract obligations. The agreement typically includes comprehensive details about final settlements, end-of-service benefits, notice period arrangements, confidentiality obligations, and mutual releases. It serves as crucial documentation for both parties' protection and can be particularly important for visa cancellation procedures and final settlement processing with UAE authorities.

What sections should be included in a Mutual Separation Agreement?

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

2. Background: Brief history of employment relationship, including start date, position, and mutual decision to separate

3. Definitions: Key terms used throughout the agreement, including 'Termination Date', 'Final Settlement', etc.

4. Termination of Employment: Formal statement of employment termination, specifying the last working day and immediate obligations

5. Final Settlement: Detailed breakdown of final payment including salary, notice period, gratuity, and other entitlements

6. Company Property: Requirements for return of company property, documents, and data

7. Confidentiality: Ongoing obligations regarding confidential information and trade secrets

8. Full and Final Settlement: Mutual release of claims and confirmation that settlement represents full discharge of obligations

9. Governing Law and Jurisdiction: Specification of UAE law as governing law and relevant courts' jurisdiction

10. Counterparts and Execution: Provisions for signing the agreement and number of copies

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

1. Non-Competition and Non-Solicitation: Restrictions on future employment and client/employee solicitation - include if employee had access to sensitive information or client relationships

2. Garden Leave: Terms of any garden leave period - include if employee is not required to work during notice period

3. Share Options/Employee Benefits: Treatment of outstanding share options or benefits - include if employee participates in such schemes

4. Handover: Detailed handover requirements - include for senior positions or complex roles

5. Reference: Terms of employment references to be provided - include if agreed as part of separation

6. Announcement: Agreed internal/external communication about departure - include for senior positions

7. Legal Fees: Payment of legal fees for reviewing agreement - include if employer is covering employee's legal costs

8. Continuation of Benefits: Any benefits continuing post-termination - include if maintaining medical insurance etc.

9. Tax Implications: Tax-related provisions - include for international employees or complex compensation structures

What schedules should be included in a Mutual Separation Agreement?

1. Schedule 1 - Final Settlement Calculation: Detailed calculation of all payments including basic salary, notice period, gratuity, leave encashment, and other benefits

2. Schedule 2 - Company Property List: Itemized list of company property to be returned

3. Schedule 3 - Handover Checklist: Detailed list of tasks, documents, and responsibilities to be handed over

4. Appendix A - Resignation Letter: Standard format resignation letter to be submitted to authorities

5. Appendix B - Release Form: Standard release form required by UAE authorities

6. Appendix C - Benefits Summary: Summary of any continuing benefits or special arrangements

Authors

Alex Denne

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

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant Industries

Banking & Financial Services

Technology

Real Estate & Construction

Healthcare

Retail & Consumer Goods

Manufacturing

Professional Services

Education

Hospitality & Tourism

Energy & Resources

Media & Entertainment

Transportation & Logistics

Relevant Teams

Human Resources

Legal

Finance

Senior Management

Operations

Administration

Compliance

Risk Management

Internal Audit

Corporate Communications

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Managing Director

General Manager

Department Head

Senior Manager

Project Manager

Technical Lead

Sales Director

Account Manager

Human Resources Manager

Financial Controller

Operations Manager

Software Engineer

Marketing Manager

Legal Counsel

Administrative Officer

Executive Assistant

Customer Service Representative

Business Development 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,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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