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Job Separation Agreement Template for Pakistan

A comprehensive legal document governed by Pakistani employment law that formalizes the termination of an employment relationship between an employer and employee. This agreement outlines the terms and conditions of the separation, including final settlement amounts, notice period requirements, confidentiality obligations, and post-employment restrictions. It ensures compliance with Pakistani labor laws, particularly the Industrial and Commercial Employment Ordinance 1968, while providing legal protection to both parties by clearly defining their rights, obligations, and the full terms of the separation.

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What is a Job Separation Agreement?

The Job Separation Agreement is a crucial document used in Pakistan when formally ending an employment relationship through mutual agreement or unilateral termination. It serves as a comprehensive record of the separation terms, ensuring compliance with Pakistani labor laws, including the Industrial and Commercial Employment Ordinance 1968 and related employment regulations. This document is typically used when companies need to document voluntary resignations, mutually agreed separations, or terminations, providing clarity on final settlements, ongoing obligations, and release of claims. It includes essential details such as separation date, financial settlements, benefit considerations, confidentiality requirements, and any post-employment restrictions, while ensuring all terms align with local legal requirements and protect both parties' interests.

What sections should be included in a Job Separation Agreement?

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

2. Background: Brief history of employment relationship, reason for separation, and context of the agreement

3. Definitions: Key terms used throughout the agreement defined for clarity and legal certainty

4. Effective Date of Separation: Clear statement of the termination date and last working day

5. Final Settlement: Details of final salary, benefits, and other compensation to be paid

6. Notice Period and Pay: Specification of notice period or payment in lieu of notice

7. Company Property: Requirements for return of company assets, documents, and intellectual property

8. Confidentiality Obligations: Ongoing obligations regarding confidential information and trade secrets

9. Full and Final Settlement: Confirmation that the agreement represents complete settlement of all claims

10. Tax Implications: Statement on tax treatment of payments and responsibilities

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

12. Execution: Signature blocks and execution requirements

What sections are optional to include in a Job Separation Agreement?

1. Non-Competition: Restrictions on working for competitors, used when employee had access to sensitive information

2. Non-Solicitation: Restrictions on soliciting employees or customers, included for senior positions

3. References: Terms regarding future employment references, included when agreed upon

4. Ongoing Cooperation: Requirements for assistance in handover or future inquiries, used for key positions

5. Medical Benefits Continuation: Terms for extending medical coverage, included when applicable

6. Equity/Share Options: Treatment of any outstanding equity or share options, for employees with such benefits

7. Legal Fees: Provisions regarding payment of legal fees, included when employer agrees to cover costs

8. Outplacement Support: Details of any career transition services offered, included when provided

What schedules should be included in a Job Separation Agreement?

1. Schedule 1 - Payment Calculation: Detailed breakdown of final settlement amount including salary, benefits, and deductions

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

3. Schedule 3 - Benefits Summary: Summary of benefits and their treatment post-separation

4. Appendix A - Confidential Information: Detailed list of confidential information and protected trade secrets

5. Appendix B - Handover Plan: Detailed plan for transitioning responsibilities and ongoing projects

6. Appendix C - Tax Calculations: Detailed breakdown of tax implications and calculations

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

Jurisdiction

Pakistan

Publisher

Genie AI

Document Type

Severance Agreement

Cost

Free to use

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