The Mutual Employment Termination Agreement is a crucial document used when both employer and employee in the Philippines mutually agree to end their employment relationship amicably. This document is particularly relevant in situations where both parties wish to formalize their agreement to separate while ensuring compliance with Philippine labor laws and regulations. It serves as a comprehensive record of the separation terms, including financial settlements, benefit computations, and mutual releases, while protecting both parties' interests. The agreement must adhere to the requirements set forth in the Philippine Labor Code and related DOLE (Department of Labor and Employment) regulations, making it essential for documenting consensual employment terminations in any industry or organization size. It helps prevent future disputes by clearly outlining all aspects of the separation, from final pay calculations to post-employment obligations.
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1. Parties: Identification of the employer and employee, including their complete legal names and addresses
2. Background: Brief history of the employment relationship, including start date, position, and mutual decision to terminate
3. Definitions: Key terms used throughout the agreement
4. Effective Date of Termination: Specific date when the employment relationship will end
5. Final Pay and Benefits: Detailed breakdown of final salary, pro-rated benefits, and other compensations
6. Separation Pay: Calculation and payment terms of separation pay if applicable
7. Settlement of Company Properties: Process for returning company assets and settling any outstanding accounts
8. Release and Waiver: Mutual release of claims and liabilities between parties
9. Tax Matters: Treatment of tax obligations related to final and separation pay
10. General Provisions: Standard clauses including governing law, entire agreement, and amendment provisions
11. Execution: Signature blocks and attestation
1. Confidentiality Obligations: Post-termination confidentiality requirements, used when employee had access to sensitive information
2. Non-Competition: Post-employment competitive restrictions, if previously agreed in employment contract
3. Transition of Duties: Process for handover of ongoing projects and responsibilities, needed for key positions
4. Reference and Future Employment: Terms regarding employment references and future employment opportunities
5. Continuing Benefits: Any benefits that will continue post-termination, such as health insurance extension
6. Stock Options/Equity: Treatment of any outstanding stock options or equity compensation
7. Legal Fees: Allocation of legal fees for agreement preparation, if applicable
8. Dispute Resolution: Specific procedures for resolving any future disputes about the agreement
1. Schedule A - Final Pay Computation: Detailed calculation of final pay including basic salary, pro-rated benefits, and deductions
2. Schedule B - Company Property Inventory: List of company properties to be returned by the employee
3. Schedule C - Outstanding Benefits: Detailed list of any outstanding benefits and their computation
4. Schedule D - Clearance Requirements: Checklist of clearance requirements from different departments
5. Appendix 1 - Certificate of Employment: Draft of the certificate of employment to be issued
6. Appendix 2 - Tax Computation: Detailed breakdown of tax calculations on final pay and benefits
Relevant legal definitions
Clauses
Relevant Industries
Banking and Finance
Information Technology
Manufacturing
Retail
Healthcare
Education
Construction
Business Process Outsourcing
Telecommunications
Hospitality
Professional Services
Energy and Utilities
Transportation and Logistics
Real Estate
Media and Entertainment
Relevant Teams
Human Resources
Legal
Compliance
Employee Relations
Corporate Secretariat
Labor Relations
HR Operations
Compensation and Benefits
Executive Management
Administration
Relevant Roles
Human Resources Director
Legal Counsel
HR Manager
Compliance Officer
Employee Relations Manager
HR Business Partner
Corporate Secretary
Labor Relations Specialist
HR Operations Manager
Compensation and Benefits Manager
Chief Human Resources Officer
HR Administrator
Legal Manager
HR Generalist
Talent Management Specialist
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