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Severance And Release Agreement Template for Philippines

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Key Requirements PROMPT example:

Severance And Release Agreement

"I need a Severance and Release Agreement for a senior technology executive in Manila who is being made redundant due to organizational restructuring, with the separation date set for March 15, 2025, including enhanced severance benefits and ongoing consultancy provisions."

Document background
The Severance and Release Agreement is a crucial document used in the Philippines when formalizing the termination of employment relationships. It serves as a legally binding contract that protects both employer and employee interests by clearly documenting the terms of separation, including financial compensation, benefits, and mutual obligations. The agreement must comply with the Philippine Labor Code, relevant DOLE regulations, and tax laws, particularly regarding the computation and payment of separation benefits. This document type is commonly used in scenarios involving voluntary resignation with severance, redundancy, or mutually agreed termination. The agreement typically includes comprehensive release provisions where the employee waives future claims against the employer in exchange for the severance package, while ensuring all statutory entitlements are properly addressed.
Suggested Sections

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

2. Background: Brief history of employment relationship, including start date, position, and reason for separation

3. Definitions: Key terms used throughout the agreement, including 'Effective Date', 'Separation Date', 'Severance Payment', and 'Released Claims'

4. Separation Terms: Details of employment termination, including last day of employment and return of company property

5. Severance Payment: Amount of severance payment, calculation basis, payment method, and timing

6. Statutory Benefits: Confirmation of payment of all statutory benefits including 13th month pay, unused leave, and other mandatory benefits

7. Release of Claims: Comprehensive release of all claims by employee against employer, with specific reference to Philippine labor laws

8. Confidentiality: Obligations regarding non-disclosure of agreement terms and company confidential information

9. Tax Provisions: Treatment of tax obligations for severance payment and other benefits

10. Acknowledgment: Employee's acknowledgment of understanding the agreement and voluntary execution

11. Governing Law: Specification of Philippine law as governing law and jurisdiction

12. Execution: Signature blocks and execution requirements

Optional Sections

1. Non-Disparagement: Mutual or one-way obligations not to make negative statements, include when reputation protection is important

2. Reference: Terms regarding future employment references, include when agreed as part of separation

3. Post-Employment Restrictions: Non-compete or non-solicitation provisions, include only if previously agreed in employment contract

4. Cooperation: Terms for employee's assistance in transition or future matters, include for senior positions

5. Benefits Continuation: Details of any continued benefits post-employment, include if offering extended benefits

6. Reaffirmation of Existing Obligations: Reference to surviving obligations from employment agreement, include if prior agreements exist

7. Revocation Period: Period during which employee can revoke acceptance, include for older employees or specific circumstances

8. Future Employment: Terms regarding potential future employment with company or affiliates, include if rehire restrictions desired

Suggested Schedules

1. Schedule A - Calculation of Severance Payment: Detailed breakdown of severance payment calculation including statutory and enhanced components

2. Schedule B - List of Benefits and Entitlements: Itemized list of all benefits and entitlements being paid out

3. Schedule C - Company Property: List of company property to be returned by the employee

4. Appendix 1 - Release Language: Detailed release language compliant with Philippine labor laws

5. Appendix 2 - Tax Computation: Breakdown of tax treatment for various components of the severance package

Authors

Alex Denne

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

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Relevant Industries

Manufacturing

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Relevant Teams

Human Resources

Legal

Finance

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Administration

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Compliance

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Relevant Roles

Chief Executive Officer

Chief Financial Officer

Department Manager

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HR Manager

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Factory Worker

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Industries







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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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