The Employment Separation Agreement is a crucial document used in Saudi Arabia when formally ending an employment relationship, whether through mutual agreement, resignation, or termination. It serves as a comprehensive record of the separation terms, incorporating requirements from Saudi Labor Law, ministerial resolutions, and Sharia principles. This document is particularly important in the Saudi Arabian context due to strict local employment regulations and the need for clear documentation of final settlements, including end-of-service benefits calculations, outstanding entitlements, and post-employment obligations. The agreement helps prevent future disputes by clearly outlining all terms of separation, confidentiality requirements, and any applicable restrictions, while ensuring compliance with mandatory local legal requirements regarding employment termination.
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1. Parties: Identification of the employer and employee, including full legal names, addresses, and relevant registration/ID numbers
2. Background: Brief history of employment relationship, reason for separation, and context of the agreement
3. Definitions: Key terms used throughout the agreement, including defined terms from Saudi Labor Law
4. Effective Date of Separation: Clear statement of the termination date and last working day
5. Final Settlement: Breakdown of final payment including salary, end-of-service benefits, and other entitlements
6. Release and Waiver: Mutual release of claims and liabilities between parties
7. Confidentiality Obligations: Ongoing obligations regarding company confidential information
8. Company Property: Requirements for return of company property and documentation
9. Tax and Social Insurance: Provisions regarding tax implications and GOSI settlements
10. Governing Law: Confirmation of Saudi Law application and jurisdiction
11. Execution: Signature blocks and execution requirements
1. Non-Compete Provisions: Restrictions on future employment - used for senior employees or those with access to sensitive information
2. Non-Solicitation: Restrictions on soliciting employees/customers - typically for management positions
3. Ongoing Cooperation: Terms for post-employment assistance - useful for key positions requiring knowledge transfer
4. Stock Options/Share Rights: Treatment of any equity-based compensation - for employees with share-based benefits
5. Reference Provision: Terms regarding future employment references - when specifically negotiated
6. Repatriation Benefits: For expatriate employees requiring repatriation assistance
7. Training Cost Recovery: When employee has undertaken sponsored training with repayment obligations
8. Continuation of Benefits: Any extended benefits post-termination - for senior executives or negotiated packages
1. Schedule 1 - Final Settlement Calculation: Detailed breakdown of all financial entitlements and deductions
2. Schedule 2 - Company Property Checklist: List of all company property to be returned
3. Schedule 3 - End of Service Benefit Calculation: Detailed calculation of end-of-service benefits as per Saudi Labor Law
4. Schedule 4 - Outstanding Leave Calculation: Calculation of any accrued but unused leave
5. Appendix A - Confidential Information Definition: Detailed list of what constitutes confidential information
6. Appendix B - Handover Plan: Detailed plan for handover of responsibilities and ongoing projects
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