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A Severance Agreement is a legal contract between an employer and departing employee that sets out the final terms and benefits when employment ends. In Nigeria, these agreements typically outline the payment package, benefits continuation, and any special conditions like non-compete clauses or confidentiality requirements under the Labour Act.

Beyond just handling compensation, these agreements protect both parties by clearly stating their rights and obligations. They often include important details about returning company property, maintaining trade secrets, and handling future references. Many Nigerian companies use these agreements to ensure smooth transitions and prevent potential disputes after an employee leaves.

Use a Severance Agreement when ending employment relationships on clear, mutually beneficial terms. Common scenarios include layoffs, voluntary resignations with negotiated exits, or retirement packages. Under Nigerian labour law, these agreements become especially valuable during corporate restructuring, mergers, or when senior executives depart.

The agreement proves essential when you need to protect company interests while ensuring fair treatment of departing staff. It helps prevent future disputes by documenting final payments, benefits, and post-employment obligations. Many Nigerian businesses use these agreements during sensitive transitions or when termination involves valuable intellectual property or client relationships.

• Simple Severance Agreement: Basic version for straightforward employment endings with standard terms and payments
• Employee Severance Agreement: Comprehensive template for general staff, including detailed benefits and confidentiality terms
• Executive Separation Agreement: Enhanced version for senior leaders with complex compensation and non-compete provisions
• Severance Package Letter: Informal format focusing on financial terms and benefits summary
• Job Separation Agreement: Specialized version emphasizing mutual releases and post-employment obligations

• Human Resources Managers: Lead the drafting and implementation of Severance Agreements, ensuring compliance with Nigerian labour laws
• Company Directors: Review and authorize agreements, especially for senior-level departures or large-scale restructuring
• Legal Counsel: Provide guidance on terms, review final agreements, and ensure protection of company interests
• Departing Employees: Review, negotiate, and sign agreements, often with professional advice
• Labor Unions: May participate in negotiations when collective bargaining agreements apply
• External Consultants: Assist with financial calculations, tax implications, and compliance requirements

• Employment Details: Gather accurate records of salary, benefits, tenure, and position
• Severance Package: Calculate final payment, including notice period, leave balances, and additional benefits
• Company Assets: List all company property to be returned, including devices and documents
• Post-Employment Terms: Define non-compete periods, confidentiality requirements, and reference arrangements
• Legal Requirements: Ensure compliance with Nigerian Labour Act provisions on termination
• Documentation: Our platform generates custom agreements that include all required elements under Nigerian law
• Review Process: Set timeline for employee review and signing, allowing for questions and clarifications

• Identification Section: Full names and details of employer and employee, including registration numbers
• Severance Terms: Clear breakdown of all payments, benefits, and timing of disbursements
• Release Clause: Mutual release from future claims under Nigerian employment law
• Confidentiality Terms: Specific obligations regarding company information protection
• Non-Compete Provisions: Geographic and time limitations aligned with Nigerian courts' precedents
• Return of Property: Detailed list of company assets to be returned
• Governing Law: Explicit reference to Nigerian Labour Act and jurisdiction
• Signature Block: Space for dated signatures, with witness requirements under Nigerian law

A Severance Agreement is often confused with a Business Acquisition Agreement during company restructuring or ownership changes in Nigeria. While both deal with transitions, they serve distinct purposes and have different scopes under Nigerian law.

• Primary Purpose: Severance Agreements focus on ending employment relationships and settling final compensation, while Business Acquisition Agreements handle the transfer of business ownership and assets
• Parties Involved: Severance Agreements are between employer and employee, whereas Business Acquisition Agreements involve business entities or owners
• Scope of Terms: Severance focuses on final pay, benefits, and post-employment obligations; acquisition deals cover business assets, liabilities, and operational transfer
• Timing and Duration: Severance is typically a one-time settlement, while acquisition agreements often include ongoing obligations and transitional arrangements
• Legal Framework: Severance follows Nigerian labour laws, while acquisitions fall under corporate and commercial law provisions