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Mutual Severance Agreement

Mutual Severance Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Mutual Severance Agreement

I need a standard Mutual Severance Agreement under UAE law for an IT developer leaving the company on good terms on March 1, 2025, with basic end-of-service benefits and standard confidentiality provisions.

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Document background
This Mutual Severance Agreement template is designed for use in the United Arab Emirates when an employer and employee mutually agree to terminate their employment relationship. The document is structured to comply with UAE Labor Law (Federal Decree-Law No. 33 of 2021) and includes comprehensive provisions for final settlements, end-of-service benefits, and mutual releases. It is particularly useful in situations where both parties wish to document a clean break and prevent future disputes. The agreement typically includes detailed calculations of entitlements, handling of confidential information, return of company property, and any post-employment obligations. It can be customized for various levels of employees, from junior staff to senior executives, with additional provisions for more complex separations involving share options, restrictive covenants, or intellectual property rights.
Suggested Sections

1. Parties: Identification of the employer and employee, including full legal names and addresses

2. Background: Brief description of the employment relationship, including start date, position, and mutual decision to terminate

3. Definitions: Key terms used throughout the agreement, including 'Effective Date', 'Final Settlement', 'End of Service Benefits' etc.

4. Termination Date: Clear statement of the employment termination date and final working day

5. Final Settlement: Comprehensive breakdown of all payments including salary, notice period, and end of service benefits

6. Payment Terms: Timeline and method of payment for all amounts due under the agreement

7. Employee Benefits: Treatment of existing benefits, insurance coverage, and any continuation periods

8. Company Property: Requirements for return of company property and documentation

9. Confidentiality Obligations: Ongoing obligations regarding confidential information

10. Release of Claims: Mutual release of claims and waiver of rights to future claims

11. Governing Law and Jurisdiction: Specification of UAE law as governing law and relevant courts

12. Entire Agreement: Standard entire agreement clause and amendment provisions

Optional Sections

1. Non-Competition and Non-Solicitation: Restrictions on future employment and client/employee solicitation - used for senior positions or when employee had access to sensitive information

2. Intellectual Property Rights: Specific provisions regarding IP created during employment - used when employee was involved in creative or technical work

3. Reference and Announcement: Agreement on how departure will be communicated and nature of references - used for senior positions or sensitive departures

4. Outplacement Services: Provision of career transition services - used for senior positions or as part of enhanced packages

5. Share Options/Awards: Treatment of existing share options or awards - used when employee participated in share schemes

6. Legal Fees: Agreement on payment of legal fees for advice on the agreement - used in senior executive agreements

7. Tax Indemnity: Tax-related provisions and indemnities - used when tax implications are complex or for international employees

Suggested Schedules

1. Schedule 1 - Final Settlement Calculation: Detailed calculation of all payments including basic salary, notice period, end of service gratuity, and other benefits

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

3. Schedule 3 - Outstanding Benefits: Details of any pro-rated bonuses, accrued but unused leave, and other benefits

4. Schedule 4 - Continuing Obligations: Detailed list of ongoing obligations including confidentiality and any restrictive covenants

5. Appendix A - Resignation Letter: Standard form resignation letter to be signed by employee

6. Appendix B - Release Form: Detailed release form complying with UAE Labor Law requirements

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
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