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Pay Settlement Agreement

Pay Settlement Agreement Template for Malaysia

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Key Requirements PROMPT example:

Pay Settlement Agreement

"I need a Pay Settlement Agreement under Malaysian law for a manufacturing company director who is leaving amicably, with a settlement sum of RM 250,000 to be paid in two installments by March 2025, including standard non-compete and confidentiality provisions."

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Document background
A Pay Settlement Agreement is typically used in Malaysian employment contexts when there is a need to formally document and finalize payment arrangements between an employer and employee. This may arise from various situations including resolution of disputes, termination settlements, bonus arrangements, or wage-related negotiations. The agreement ensures compliance with Malaysian employment laws while providing clarity and certainty for all parties involved. It includes essential elements such as payment terms, tax considerations, statutory deductions (EPF and SOCSO), and appropriate releases. The document serves as a comprehensive record of the settlement terms and helps prevent future disputes by clearly outlining all parties' rights and obligations.
Suggested Sections

1. Parties: Identification of the employer and employee with full legal names and details

2. Background: Context of the employment relationship, dispute or circumstances leading to the settlement

3. Definitions: Definitions of key terms used throughout the agreement

4. Settlement Sum: Details of the settlement amount and what it comprises

5. Payment Terms: Timing, method, and conditions of payment

6. Tax and Statutory Deductions: Treatment of tax, EPF, SOCSO and other statutory deductions

7. Release and Waiver: Mutual release of claims and waiver of rights

8. Confidentiality: Obligations regarding confidentiality of the settlement terms

9. Governing Law: Specification of Malaysian law as governing law and jurisdiction

10. Entire Agreement: Confirmation that this agreement represents the entire understanding between parties

Optional Sections

1. Non-Disparagement: Mutual obligations not to make negative statements about each other - included when reputation protection is important

2. Reference: Terms regarding future employment references - included when agreed as part of settlement

3. Return of Company Property: Provisions for returning company assets - included when employee has company property

4. Post-Settlement Obligations: Ongoing obligations after settlement - included when there are continuing duties

5. Legal Advice: Acknowledgment of receiving independent legal advice - included when required by company policy or for additional protection

6. Resignation: Terms of resignation if settlement includes termination of employment - included when employment is ending

Suggested Schedules

1. Payment Schedule: Detailed breakdown of settlement sum and payment installments if applicable

2. List of Claims: Specific list of claims being settled and released

3. Resignation Letter: Template or copy of resignation letter if applicable

4. Company Property Checklist: List of company property to be returned

5. Tax Computation: Breakdown of tax treatment of different payment components

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Manufacturing

Financial Services

Technology

Retail

Healthcare

Construction

Education

Professional Services

Hospitality

Telecommunications

Energy

Transportation

Real Estate

Agriculture

Relevant Teams

Human Resources

Legal

Finance

Payroll

Compliance

Industrial Relations

Executive Leadership

Employee Relations

Relevant Roles

Human Resources Director

HR Manager

Legal Counsel

Compensation and Benefits Manager

Finance Director

Chief Financial Officer

Employee Relations Manager

HR Business Partner

Payroll Manager

Industrial Relations Manager

Compliance Officer

General Manager

Chief Executive Officer

Department Head

Line Manager

Industries
Employment Act 1955: The principal legislation governing employment relationships in Peninsular Malaysia, covering terms of employment, wages, and other employment conditions
Industrial Relations Act 1967: Governs the relationship between employers and employees, including dispute resolution procedures and settlement agreements in employment matters
Wages Councils Act 1947: Provides for the establishment of wages councils and regulation of minimum wages in certain circumstances
Income Tax Act 1967: Relevant for determining tax implications of settlement payments and necessary tax provisions in the agreement
Limitation Act 1953: Sets time limits for bringing various types of claims, which may be relevant to the settlement agreement
Contracts Act 1950: Provides the basic legal framework for contract formation and enforcement in Malaysia
Employment Insurance System Act 2017: May be relevant if the settlement involves unemployment benefits or related matters
Employees Provident Fund Act 1991: Relevant if the settlement includes provisions related to EPF contributions or adjustments
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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