The Basic Separation Agreement is a crucial document used in Saudi Arabia when formally ending an employment relationship by mutual consent or unilateral decision. It must comply with Saudi Labor Law (Royal Decree No. M/51) and related Ministry of Human Resources and Social Development regulations. This agreement is typically used when an employee's service is being terminated through resignation, mutual agreement, or employer-initiated separation, and includes essential provisions for final settlements, end-of-service benefits, confidentiality obligations, and property return. The document ensures all termination processes follow local legal requirements while protecting both parties' rights and obligations. It's particularly important in the Saudi context due to specific statutory requirements for employment termination and the calculation of terminal benefits.
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1. Parties: Identification of the employer and employee, including full legal names, addresses, and relevant identification numbers
2. Background: Brief description of employment history, current position, and mutual agreement to terminate
3. Definitions: Key terms used throughout the agreement, including 'Effective Date', 'Termination Date', and other relevant terminology
4. Termination of Employment: Specific details about the termination, including the effective date and nature of separation
5. Final Settlement: Comprehensive breakdown of all financial entitlements including salary, end-of-service benefits, and other payments
6. Company Property: Requirements for return of company property, documents, and equipment
7. Confidentiality Obligations: Ongoing obligations regarding confidential information and trade secrets
8. Final Release: Mutual release of claims, subject to terms of the agreement
9. Governing Law: Confirmation that Saudi law governs the agreement and submission to Saudi courts
10. Execution: Signature blocks and execution requirements
1. Non-Competition: Restrictions on working for competitors, used when employee had access to sensitive information or significant client relationships
2. Non-Solicitation: Restrictions on approaching company employees or clients, included for senior positions
3. Continuing Obligations: Any ongoing duties or responsibilities post-termination, used for senior roles or specific projects
4. Reference Provision: Terms regarding future employment references, included when mutually agreed
5. Handover Requirements: Detailed handover process for senior positions or critical roles
6. Tax Indemnity: Provisions regarding tax liability, included for high-value settlements or expatriate employees
7. Social Media: Obligations regarding professional social media accounts and contacts, relevant for marketing or client-facing roles
8. Cooperation in Legal Matters: Commitment to assist in future legal proceedings, relevant for senior positions or regulated industries
1. Schedule 1: Financial Settlement Calculation: Detailed breakdown of all financial elements including salary, benefits, and statutory entitlements
2. Schedule 2: Company Property List: Itemized list of company property to be returned
3. Schedule 3: Handover Schedule: Detailed list of tasks, documents, and responsibilities to be handed over
4. Appendix A: Confidential Information Definition: Detailed description of what constitutes confidential information
5. Appendix B: End of Service Benefits Calculation: Detailed calculation as per Saudi Labor Law requirements
6. Appendix C: Non-Competition Terms: Specific details of non-compete restrictions including geographic and temporal scope
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