Document background
A Severance Contract is a crucial document used when terminating an employment relationship in India, whether through mutual agreement, redundancy, or organizational restructuring. This agreement must comply with Indian labor laws, including the Industrial Disputes Act 1947, Payment of Gratuity Act 1972, and relevant state-specific regulations. The document typically includes detailed calculations of severance pay, treatment of benefits, confidentiality obligations, and release of claims. It serves to protect both employer and employee interests by clearly documenting the separation terms, preventing future disputes, and ensuring all statutory requirements are met. The agreement is particularly important in cases involving senior executives, long-term employees, or situations requiring careful handling of sensitive information and post-employment obligations.
