The Termination Release Agreement is a crucial document used in Malaysian employment law context when formally ending an employment relationship. It is typically implemented when both parties agree to terminate the employment relationship and wish to document the terms of separation clearly. This document serves multiple purposes: it confirms the termination date, specifies all final payments and benefits, includes mutual releases preventing future claims, and outlines any continuing obligations. The agreement must comply with Malaysian employment laws, including the Employment Act 1955 and related regulations, particularly regarding mandatory termination benefits and notice periods. It's especially important in situations involving senior employees, sensitive positions, or when significant termination packages are involved. The document provides legal certainty and protection for both employer and employee, helping to prevent future disputes and ensuring a clean break in the employment relationship.
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1. Parties: Identifies and defines all parties to the agreement
2. Background: Recitals explaining the context of the employment relationship and reason for termination
3. Definitions: Defines key terms used throughout the agreement
4. Termination Date: Specifies the effective date of employment termination
5. Consideration: Details the termination benefits, payments, or other consideration being provided
6. Final Payment Terms: Specifics of final salary, benefits, and statutory payments
7. Company Property: Requirements for return of company property and documents
8. Confidentiality Obligations: Ongoing confidentiality obligations post-termination
9. Mutual Release: Release of claims by both parties
10. Non-Admission: Statement that the agreement does not constitute admission of liability
11. Governing Law: Specifies Malaysian law as governing law and jurisdiction
12. Entire Agreement: Confirms this document represents the entire agreement between parties
13. Execution: Signature blocks and execution requirements
1. Non-Compete Obligations: Include when there are post-employment competitive restrictions
2. Non-Solicitation: Include when restricting solicitation of employees or customers is required
3. Continuing Obligations: Include when specific obligations from the employment contract survive
4. Reference: Include when agreed form of reference is part of the termination package
5. Tax Indemnity: Include when tax treatment of payments needs clarification
6. Legal Advice: Include when confirming employee has received independent legal advice
7. Outplacement Support: Include when outplacement services are being provided
8. Share Options/Awards: Include when dealing with existing employee share schemes
9. Public Announcements: Include for senior executives or public-facing roles
10. Medical Benefits Extension: Include when extending medical coverage post-termination
1. Schedule 1 - Payment Calculation: Detailed breakdown of all payments and benefits
2. Schedule 2 - Company Property List: Itemized list of company property to be returned
3. Schedule 3 - Agreed Form of Reference: Template of agreed employment reference if applicable
4. Schedule 4 - Surviving Contractual Terms: List of employment contract terms that survive termination
5. Appendix A - Release Claims List: Specific claims being released under the agreement
6. Appendix B - Confidential Information: Definition and scope of confidential information
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