Mutual Termination Of Employment Agreement for Malaysia

Mutual Termination Of Employment Agreement Template for Malaysia

A comprehensive agreement governed by Malaysian law that documents the mutually agreed termination of employment between an employer and employee. This document outlines the terms and conditions of the separation, including final payments, benefits, mutual releases, and ongoing obligations. It ensures compliance with Malaysian employment legislation, particularly the Employment Act 1955 and Industrial Relations Act 1967, while protecting both parties' interests and providing clear documentation of the voluntary nature of the termination arrangement.

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What is a Mutual Termination Of Employment Agreement?

The Mutual Termination Of Employment Agreement is utilized when both employer and employee in Malaysia mutually agree to end their employment relationship on agreed terms. This document is essential for ensuring a clear, documented, and legally compliant separation process under Malaysian employment law. It should be used when both parties wish to terminate the employment relationship amicably and want to document the terms of separation, including final payments, benefits, mutual releases, and ongoing obligations. The agreement helps prevent future disputes by clearly outlining all termination terms and ensures compliance with Malaysian legislation, including the Employment Act 1955 and Industrial Relations Act 1967. It's particularly important for protecting both parties' interests and maintaining professional relationships post-employment.

What sections should be included in a Mutual Termination Of Employment Agreement?

1. Parties: Identification of the employer and employee entering into the agreement

2. Background: Brief context of the employment relationship and mutual decision to terminate

3. Definitions: Key terms used throughout the agreement

4. Termination Date: Specific date when employment relationship will end

5. Final Payment and Benefits: Details of salary, unused leave, and other entitlements up to termination date

6. Mutual Release: Both parties' agreement to release each other from claims relating to employment

7. Company Property: Obligation to return all company property and documents

8. Confidentiality: Ongoing obligations regarding confidential information

9. Tax Implications: Statement on tax treatment of payments and each party's responsibilities

10. Governing Law: Specification that Malaysian law governs the agreement

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

1. Garden Leave: Used when employee will remain on payroll but not attend work until termination date

2. Post-termination Restrictions: Include if existing employment contract contains restrictions that will continue

3. Reference: Terms regarding future employment references

4. Outplacement Support: Include if company is providing career transition services

5. Share Options/Awards: Required if employee has outstanding share options or awards

6. Medical Benefits Extension: Include if continuing medical coverage post-termination

7. Announcement: Terms regarding internal/external communication of the termination

What schedules should be included in a Mutual Termination Of Employment Agreement?

1. Schedule 1 - Payment Calculation: Detailed breakdown of all payments including salary, benefits, and statutory entitlements

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

3. Schedule 3 - Benefits Summary: Summary of benefits and their treatment post-termination

4. Appendix A - Acknowledgment Form: Form confirming return of company property and documents

5. Appendix B - Tax Declaration: Employee's declaration for tax purposes regarding termination payments

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

Jurisdiction

Malaysia

Publisher

Genie AI

Cost

Free to use
Relevant Industries

Banking & Finance

Technology

Manufacturing

Professional Services

Retail

Healthcare

Education

Construction

Telecommunications

Energy & Resources

Media & Entertainment

Hospitality

Logistics & Transportation

Relevant Teams

Human Resources

Legal

Compliance

Industrial Relations

Employee Relations

Corporate Secretariat

Risk Management

Finance

Payroll

Relevant Roles

Human Resources Director

HR Manager

Legal Counsel

Employment Lawyer

HR Business Partner

Compliance Officer

Chief Human Resources Officer

Employee Relations Manager

HR Operations Manager

Legal Manager

Company Secretary

Chief Legal Officer

Talent Management Director

Personnel Manager

Industrial Relations 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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