Document background
A Severance Pay Agreement is a crucial document used when terminating an employment relationship in Nigeria, whether through mutual agreement, redundancy, or other circumstances. It provides a legally binding framework that outlines the financial compensation, benefits, and obligations of both parties during the separation process. The agreement must comply with Nigerian employment legislation, including the Labour Act, Pension Reform Act, and Personal Income Tax Act. This document typically includes detailed provisions for severance calculations, payment schedules, tax treatment, benefits continuation, confidentiality obligations, and release of claims. It serves as protection for both employer and employee by clearly documenting all aspects of the separation terms and preventing future disputes.
