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Severance Package Letter Template for Hong Kong

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Key Requirements PROMPT example:

Severance Package Letter

"I need a Severance Package Letter for a senior technology executive being made redundant due to restructuring, with a termination date of March 15, 2025, including provisions for unvested stock options and extended health benefits."

Document background
The Severance Package Letter is a crucial document used in Hong Kong employment terminations where an employee is entitled to receive statutory severance pay under the Employment Ordinance. It is typically issued when an employee has been made redundant or laid off after serving at least 24 months with the employer. The document must comply with Hong Kong's strict employment laws, particularly regarding severance calculations, notice periods, and mandatory benefits. This letter serves multiple purposes: it confirms the termination details, outlines all financial entitlements, addresses benefit arrangements, and establishes a clear record of the separation terms. The document should be drafted with careful attention to both statutory requirements and any additional company policies or contractual obligations.
Suggested Sections

1. Letter Header: Company letterhead, date, and employee's details

2. Confirmation of Termination: Clear statement of employment termination, including last working day and reason if appropriate

3. Notice Period Arrangements: Details of notice period or payment in lieu of notice

4. Severance Payment: Breakdown of statutory severance payment calculation and amount

5. Final Payment Details: Breakdown of all final payments including unused annual leave, pro-rata bonus if applicable

6. Benefits Termination: Information about termination of benefits including medical insurance, MPF arrangements

7. Company Property: Requirements for returning company property and timeline

8. Confidentiality Obligations: Reminder of ongoing confidentiality obligations

9. Tax Information: Statement about tax treatment of payments

10. Full and Final Settlement: Statement confirming this represents full and final settlement

11. Acknowledgment: Space for employee signature and date to acknowledge receipt and acceptance

Optional Sections

1. Outplacement Support: Details of any career transition services offered

2. Reference Letter: Information about providing employment references

3. Non-Compete Provisions: Reminder of any existing non-compete obligations, if applicable

4. Share Options/Long-Term Incentives: Treatment of outstanding equity or long-term incentive awards

5. International Assignment Provisions: Special provisions for employees on international assignments

6. Legal Consultation Allowance: Details of any allowance for seeking legal advice

7. Medical Coverage Extension: Any extended medical coverage arrangements

8. Release Agreement: Additional section if a release of claims is required

Suggested Schedules

1. Schedule 1 - Payment Calculation: Detailed calculation of severance payment and all other payments

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

3. Schedule 3 - Benefits Summary: Detailed summary of benefit termination dates and any conversion rights

4. Appendix A - Tax Information Sheet: Detailed information about tax treatment of various payment components

5. Appendix B - Handover Checklist: Checklist for completion of handover tasks

Authors

Alex Denne

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

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