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Mutual Separation Letter for Singapore

Mutual Separation Letter Template for Singapore

A Mutual Separation Letter is a formal document used in Singapore to document the agreed termination of employment between an employer and employee. It outlines the terms and conditions of the separation, including the last day of employment, final payments, benefits, and any continuing obligations. The document must comply with Singapore's Employment Act and related legislation, ensuring fair treatment and clear documentation of the separation terms for both parties.

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Mutual Separation Letter

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What is a Mutual Separation Letter?

The Mutual Separation Letter serves as a crucial document in Singapore's employment landscape when both employer and employee agree to end their employment relationship amicably. It provides legal protection for both parties by clearly documenting the separation terms, financial settlements, and ongoing obligations. This document is particularly relevant during organizational restructuring, career transitions, or when alternative employment arrangements are sought. The letter must align with Singapore's Employment Act, CPF regulations, and other relevant legislation, ensuring all statutory requirements are met while providing a clear framework for the separation process.

What sections should be included in a Mutual Separation Letter?

1. Date and Parties: Opening with date and details of employer and employee

2. Last Day of Employment: Clear statement of employment termination date and confirmation of mutual agreement to separate

3. Final Payment Details: Breakdown of final salary, unused leave, and other entitlements including CPF contributions

4. Return of Company Property: Requirements and timeline for returning company assets, devices, and documents

5. Confidentiality Obligations: Ongoing confidentiality requirements and handling of sensitive information post-separation

6. Full and Final Settlement: Statement of mutual release from claims and acknowledgment of settlement terms

What sections are optional to include in a Mutual Separation Letter?

1. Reference Letter: Terms and conditions regarding the provision of employment references

2. Non-Compete Provisions: Restatement or modification of existing non-compete and non-solicitation obligations

3. Medical Benefits Extension: Details of any extended medical coverage or insurance benefits

4. Outplacement Support: Description of career transition assistance and support services provided

What schedules should be included in a Mutual Separation Letter?

1. Schedule A - Final Payment Calculation: Detailed breakdown of all final payments including salary, bonuses, and leave encashment

2. Schedule B - Company Property List: Comprehensive inventory of company property to be returned

3. Schedule C - Benefit Details: Summary of any continuing benefits and their duration post-separation

Authors

Alex Denne

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

Jurisdiction

Singapore

Publisher

Ƶ

Document Type

Termination Letter

Cost

Free to use
Relevant legal definitions




















Clauses




















Industries

Employment Act (Chapter 91): Core employment legislation covering notice periods, salary entitlements, leave calculations, and final payment requirements. 2019 amendments extended coverage to all employees regardless of salary level.

Central Provident Fund Act (Chapter 36): Governs mandatory social security savings system including employer CPF contribution obligations, treatment during notice period, and final CPF settlement requirements.

Income Tax Act (Chapter 134): Regulates tax treatment of separation payments, reporting obligations, and tax handling of benefits and perks during separation.

Industrial Relations Act (Chapter 136): Addresses union-related matters and collective agreement requirements if employee is a union member.

Employment Claims Act 2016: Establishes dispute resolution mechanisms and statutory limits for employment-related claims.

Personal Data Protection Act 2012: Regulates the handling and retention of employee's personal data during and after separation.

MOM Guidelines: Ministry of Manpower guidelines covering fair employment practices, managing excess manpower, and responsible retrenchment practices.

Common Law Principles: Fundamental contract law principles governing mutual agreements, including requirements for enforceability and proper execution.

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

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