The Employee Termination Agreement is a crucial document used in Malta when formally ending an employment relationship through mutual agreement or as part of a structured dismissal process. It ensures compliance with Malta's Employment and Industrial Relations Act and related employment legislation, including EU directives applicable in Malta. This agreement is particularly important in the Maltese context due to the country's specific requirements regarding employment termination, notice periods, and statutory benefits. The document typically includes comprehensive details about final settlements, tax implications, post-employment obligations, and any special arrangements such as garden leave or non-compete provisions. It serves as a crucial risk management tool for employers while providing clarity and protection for employees regarding their termination terms.
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1. Parties: Identification of the employer and employee, including full legal names, addresses, and relevant registration/identification numbers
2. Background: Brief context of the employment relationship, including start date, position, and reason for termination if mutually agreed
3. Definitions: Definitions of key terms used throughout the agreement
4. Termination Date: Specific date when employment will terminate and final working day if different
5. Payment Terms: Details of final salary, notice pay, statutory benefits, and any additional payments
6. Tax and Social Security: Clarification on tax treatment of payments and social security obligations
7. Company Property: Requirements for return of company property and timeline
8. Confidentiality Obligations: Ongoing confidentiality obligations post-employment
9. Full and Final Settlement: Confirmation that the agreement represents full and final settlement of all claims
10. References: Agreement on the form and content of employment references
11. Acknowledgments: Employee acknowledgments regarding independent legal advice and understanding of terms
12. Governing Law: Confirmation of Maltese law as governing law and jurisdiction
1. Garden Leave: Used when employee is required to serve notice period away from workplace
2. Post-termination Restrictions: Include when non-compete or non-solicitation restrictions are being imposed
3. Continuing Benefits: Required when certain benefits continue post-termination
4. Share Options/Awards: Needed when addressing treatment of existing share schemes or awards
5. Legal Fees: Include when employer is contributing to employee's legal fees for reviewing agreement
6. Outplacement Support: Used when providing career transition services
7. Announcement: Include when parties agree on specific internal/external communications about departure
8. Resignation from Offices: Required when employee holds director or other corporate positions
1. Schedule 1 - Payment Calculation: Detailed breakdown of all payments including salary, notice, leave, and statutory entitlements
2. Schedule 2 - Company Property: Itemized list of company property to be returned
3. Schedule 3 - Post-termination Restrictions: Detailed terms of any continuing restrictions on employee activities
4. Appendix A - Certificate of Compliance: Employee declaration of compliance with return of property and information
5. Appendix B - Reference Template: Agreed form of employment reference
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