The Mutual Separation Letter serves as a formal documentation of a consensual employment termination in Malaysia, typically used when both employer and employee agree to end the employment relationship amicably. This document is particularly relevant during organizational restructuring, career transitions, or when parties seek an alternative to traditional resignation or termination processes. It must comply with Malaysian employment laws, including the Employment Act 1955 and Industrial Relations Act 1967, while covering essential elements such as separation benefits, final payments, continuing obligations, and release of claims. The letter provides legal protection for both parties and helps ensure a smooth transition while maintaining professional relationships.
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1. Letter Header: Company letterhead, date, reference number, and addressee details
2. Subject Line: Clear indication that this is a Mutual Separation Letter
3. Opening Paragraph: Reference to prior discussions and confirmation of mutual agreement to terminate employment
4. Employment Details: Current position, length of service, and last working day
5. Separation Terms: Core financial terms including final salary, separation payment, and other entitled benefits
6. Return of Company Property: List of items to be returned and deadline for return
7. Confidentiality: Reminder of ongoing confidentiality obligations
8. Full and Final Settlement: Statement confirming this as full and final settlement of all claims
9. Acknowledgment: Space for both parties to sign and date the letter
1. Non-Compete Clause: For senior employees or those with access to sensitive information, outlining restrictions on future employment
2. Reference Provision: Terms regarding the provision of employment references, if agreed
3. Medical Benefits Extension: For cases where medical benefits are extended post-employment
4. Outstanding Leave: When there is accumulated leave to be addressed
5. Share Options/Long-Term Incentives: For employees who participate in share schemes or long-term incentive plans
6. Transition Duties: When the employee is required to assist in handover or knowledge transfer
7. Tax Indemnity: When separation payments are significant and tax implications need to be addressed
1. Payment Schedule: Detailed breakdown of all payments including basic salary, notice pay, separation payment, and other benefits
2. Benefits Summary: List of benefits and their treatment post-separation
3. Company Property Checklist: Itemized list of company property to be returned
4. Handover Plan: If applicable, schedule of transition duties and deadlines
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Banking and Financial Services
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Human Resources
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