The Employment Settlement Agreement is a crucial legal document used in Malta when an employer and employee agree to terminate their employment relationship on mutually agreed terms. This document is particularly relevant in situations involving redundancy, voluntary departure, or the resolution of workplace disputes. It serves to provide legal certainty and finality by documenting all agreed terms including financial settlements, confidentiality obligations, and waivers of claims. The agreement must comply with Maltese employment law, including the Employment and Industrial Relations Act, as well as relevant EU regulations. It typically requires the employee to obtain independent legal advice to ensure they understand the implications of waiving their rights to bring future claims. The document is especially important in Malta's business environment, where maintaining good employment relations and ensuring legal compliance are paramount for both local and international companies operating within the jurisdiction.
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1. Parties: Identification of the employer and employee, including full legal names and addresses
2. Background: Brief history of employment relationship, reason for termination, and context of settlement
3. Definitions: Key terms used throughout the agreement, including 'Termination Date', 'Settlement Sum', 'Claims', etc.
4. Termination of Employment: Confirmation of employment termination date and immediate obligations
5. Settlement Payments: Detailed breakdown of all payments, timing, and tax treatment under Maltese law
6. Tax Indemnity: Employee's responsibility for tax liabilities and indemnification of employer
7. Waiver of Claims: Comprehensive release of all employment-related claims under Maltese law
8. Company Property: Requirements for return of company property and confirmation of data deletion
9. Confidentiality: Obligations regarding confidentiality of agreement terms and company information
10. Reference: Terms of employment reference to be provided
11. Legal Advice: Confirmation that employee received independent legal advice
12. Entire Agreement: Standard entire agreement clause
13. Governing Law: Confirmation of Maltese law as governing law and jurisdiction
14. Execution: Signature blocks and execution requirements
1. Post-Termination Restrictions: Reaffirmation or modification of existing restrictive covenants, used when original employment contract contained such restrictions
2. Garden Leave: Terms of any garden leave period, if applicable before final termination
3. Share Options/Benefits: Treatment of outstanding share options or benefits, used when employee participated in such schemes
4. Outplacement Support: Details of any career transition services offered, if part of settlement
5. Announcement: Agreed internal/external communications about departure, used for senior employees
6. Ongoing Cooperation: Terms for assistance with handover or future inquiries, typically for senior roles
7. Medical Insurance: Continuation or termination of medical benefits, if applicable
8. Legal Costs: Terms for payment of employee's legal costs in reviewing agreement, if offered
1. Schedule 1 - Payment Details: Detailed breakdown of settlement sum, including basic pay, notice pay, statutory redundancy, ex-gratia payments
2. Schedule 2 - Claims: Comprehensive list of specific claims being waived under Maltese and EU law
3. Schedule 3 - Company Property: Itemized list of company property to be returned
4. Schedule 4 - Reference: Agreed form of employment reference
5. Appendix 1 - Legal Advisor's Certificate: Certificate from independent legal advisor confirming advice given
6. Appendix 2 - Resignation Letter: Template resignation letter if required as part of settlement
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