The Mutual Termination of Employment agreement is utilized when both an employer and employee in Australia agree to end their employment relationship by mutual consent. This document is particularly relevant in situations where a clean and amicable separation is desired, such as during organizational restructuring, career transitions, or when both parties agree that the employment relationship has run its course. The agreement helps prevent future disputes by clearly documenting the terms of separation, including final payments, entitlements, and ongoing obligations. It must comply with Australian employment law, particularly the Fair Work Act 2009, and should address all statutory requirements while protecting both parties' interests. This document is distinct from unilateral termination documents as it emphasizes the consensual nature of the separation and often includes mutually agreed terms that may go beyond statutory minimums.
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1. Parties: Identification of the employer and employee, including full legal names and relevant details
2. Background: Brief context of the employment relationship and mutual decision to terminate
3. Definitions: Key terms used throughout the agreement
4. Termination Date: Clear specification of the last day of employment
5. Mutual Agreement: Statement confirming both parties agree to terminate the employment relationship
6. Final Payment: Details of final salary, notice period payments, and statutory entitlements
7. Leave Entitlements: Calculation and payment of outstanding annual leave, long service leave, and other leave entitlements
8. Return of Company Property: Requirements and timeline for returning company assets and property
9. Confidentiality: Ongoing obligations regarding confidential information
10. Release and Waiver: Mutual release from claims related to employment and its termination
11. Tax Treatment: Acknowledgment of tax implications and responsibilities
12. Governing Law: Specification that Australian law governs the agreement
13. Execution: Signing provisions and execution requirements
1. Garden Leave: Applicable if the employee will be paid but not required to work during the notice period
2. Post-Employment Restrictions: Include if there are non-compete or non-solicitation obligations to be maintained
3. Reference and Announcements: Terms regarding employment references and how the departure will be communicated
4. Share Options/Benefits: Required if the employee has company shares or ongoing benefits that need addressing
5. Intellectual Property: Necessary for roles involving creation of IP or access to company patents/trademarks
6. Ongoing Cooperation: Used when employee might need to assist with handover or future queries
7. Legal Advice: Acknowledgment that parties had opportunity to seek independent legal advice
8. Severance Package: Include if additional payments beyond statutory requirements are being offered
1. Schedule 1 - Payment Calculation: Detailed breakdown of all final payments, including salary, entitlements, and any special payments
2. Schedule 2 - Company Property Register: List of all company property to be returned
3. Schedule 3 - Continuing Obligations: Detailed list of ongoing obligations from the original employment contract that survive termination
4. Appendix A - Resignation Letter: Standard form resignation letter to be signed by employee
5. Appendix B - Statutory Declaration: If required, declaration confirming return of all company property and information
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