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Employee Separation Agreement for Philippines

Employee Separation Agreement Template for Philippines

This Employee Separation Agreement is a comprehensive legal document governed by Philippine labor law that formalizes the termination of employment between an employer and employee. It outlines the terms and conditions of the separation, including separation pay, benefits, confidentiality obligations, and mutual releases of claims. The agreement ensures compliance with Philippine Labor Code requirements while providing clear documentation of the parties' rights and obligations post-employment. It includes provisions for final compensation calculation, tax considerations, and various statutory requirements specific to the Philippine jurisdiction.

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What is a Employee Separation Agreement?

The Employee Separation Agreement is a crucial document used in the Philippines when formalizing the end of an employment relationship, whether through mutual agreement, resignation, retirement, or termination. This document must comply with the Philippine Labor Code and related employment regulations, including DOLE (Department of Labor and Employment) requirements. It serves multiple purposes: documenting the terms of separation, outlining financial settlements, protecting both parties' interests, and ensuring legal compliance. The agreement typically includes detailed calculations of separation benefits, final pay, tax implications, and post-employment obligations. It's particularly important in the Philippine context where employment rights are strongly protected, and proper documentation is essential for avoiding future disputes.

What sections should be included in a Employee Separation Agreement?

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

2. Background: Brief history of employment relationship, including start date, position, and context of separation

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

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

5. Basis for Separation: Legal grounds for termination and mutual agreement to separate

6. Separation Benefits: Detailed breakdown of all financial benefits, including statutory and additional payments

7. Final Pay Computation: Calculation of final salary, unused leave, pro-rated bonuses, and other entitlements

8. Tax Treatment: Classification of payments for tax purposes and responsibilities for tax payments

9. Release and Waiver: Mutual release of claims and liabilities between parties

10. Confidentiality Obligations: Ongoing duties regarding confidential information and trade secrets

11. Return of Company Property: Requirements and timeline for returning all company assets and documents

12. General Provisions: Standard clauses including governing law, severability, and entire agreement provisions

13. Execution: Signature blocks and attestation requirements

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

1. Non-Compete Provisions: Restrictions on future employment with competitors, used when employee had access to sensitive information or high-level position

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

3. Post-Employment Assistance: Terms of any outplacement or transition support offered by the employer

4. Medical Benefits Extension: Details of continued medical coverage if offered beyond separation

5. Reference Provision: Terms regarding future employment references and agreed communication about the separation

6. Dispute Resolution: Specific procedures for resolving disputes, particularly relevant for senior executives

7. Stock Options/Equity: Treatment of any outstanding equity compensation, relevant for employees with stock options

8. Retirement Benefits: Special provisions for retirement-eligible employees

9. Cooperation Clause: Terms requiring employee cooperation in transition or future legal matters

What schedules should be included in a Employee Separation Agreement?

1. Schedule A - Computation of Separation Benefits: Detailed calculation of all separation payments including statutory and contractual benefits

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

3. Schedule C - Confidential Information Definition: Comprehensive list of what constitutes confidential information

4. Schedule D - Outstanding Loans and Deductions: List of any outstanding loans or amounts to be deducted from final settlement

5. Schedule E - Clearance Requirements: Checklist of clearance requirements from different departments

6. Appendix 1 - Certificate of Employment: Standard format of employment certificate to be issued

7. Appendix 2 - Quitclaim Template: Format of the quitclaim to be signed upon receipt of all benefits

Authors

Alex Denne

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

Jurisdiction

Philippines

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions








































Clauses






























Relevant Industries

Manufacturing

Information Technology

Financial Services

Retail

Healthcare

Education

Professional Services

Construction

Telecommunications

Business Process Outsourcing

Mining

Agriculture

Transportation

Real Estate

Energy

Media and Entertainment

Relevant Teams

Human Resources

Legal

Finance

Compliance

Executive Leadership

Administrative Services

Employee Relations

Payroll

Corporate Governance

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Department Manager

Regional Manager

Sales Representative

Software Developer

Account Manager

Administrative Assistant

Operations Manager

Production Supervisor

Human Resources Manager

Marketing Director

Financial Analyst

Project Manager

Research Scientist

Customer Service Representative

Business Development Manager

Quality Assurance Specialist

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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