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Termination And Settlement Agreement for United Arab Emirates

Termination And Settlement Agreement Template for United Arab Emirates

A comprehensive legal document governed by UAE Federal Labor Law that formalizes the mutual agreement between an employer and employee to terminate their employment relationship. The agreement details the terms of separation, including final settlements, end of service benefits, and mutual releases of claims, while ensuring compliance with UAE employment regulations. It provides legal certainty for both parties by documenting all financial entitlements, post-termination obligations, and confidentiality requirements, serving as a complete record of the termination arrangement and preventing future disputes.

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What is a Termination And Settlement Agreement?

The Termination And Settlement Agreement is a crucial document used in the United Arab Emirates when an employment relationship is being concluded by mutual consent. It serves as a comprehensive record of the termination terms and ensures compliance with UAE Federal Labor Law No. 33 of 2021. This agreement is particularly important in the UAE context where end of service benefits and final settlements are strictly regulated, and proper documentation is essential for visa cancellation and labor law compliance. The document typically includes detailed calculations of termination payments, acknowledgment of received benefits, mutual releases, and any post-termination obligations. It provides protection for both employers and employees by clearly documenting agreed terms and preventing future disputes.

What sections should be included in a Termination And Settlement Agreement?

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

2. Background: Brief history of employment relationship, reason for termination, and intention to settle all claims

3. Definitions: Key terms used throughout the agreement, including 'Termination Date', 'Settlement Sum', and other relevant definitions

4. Termination of Employment: Formal statement of employment termination, specifying the last working day and immediate obligations

5. Settlement Payments: Detailed breakdown of all payments including salary, end of service gratuity, and any additional settlements

6. Tax and Legal Compliance: Statements regarding tax treatment and compliance with UAE labor laws

7. Mutual Release and Waiver: Comprehensive release of claims by both parties

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

9. Confidentiality: Ongoing obligations regarding confidential information

10. Governing Law and Jurisdiction: Specification of UAE law as governing law and relevant courts for disputes

What sections are optional to include in a Termination And Settlement Agreement?

1. Post-Termination Restrictions: Non-compete and non-solicitation provisions, used when employee had access to sensitive information or key clients

2. Share Options/Employment Benefits: Treatment of outstanding benefits, used when employee participated in share schemes or had additional benefits

3. Legal Fees: Provisions regarding payment of legal fees, used when agreed to cover employee's legal costs

4. References: Terms regarding future employment references, used when specifically negotiated

5. Communication to Stakeholders: Agreed announcement of departure, used for senior employees or public-facing roles

6. Assistance with Handover: Terms for transition of duties, used for complex roles requiring handover

7. Immigration Status: Provisions regarding visa cancellation and immigration matters, used for expatriate employees

8. Garden Leave: Terms of any garden leave period, used when employee serves notice period away from workplace

What schedules should be included in a Termination And Settlement Agreement?

1. Schedule 1 - Settlement Payment Calculation: Detailed calculation of all payment components including basic salary, notice pay, and end of service gratuity

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

3. Schedule 3 - Outstanding Benefits: Detail of any pro-rated bonuses, commission, or other benefits

4. Appendix A - Release Form: Standard form of release to be signed upon receipt of settlement payment

5. Appendix B - Handover Document: Template for documenting handover of responsibilities and ongoing projects

6. Appendix C - Reference Template: Agreed format and content of future employment references if applicable

Authors

Alex Denne

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

Publisher

Genie AI

Cost

Free to use
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