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Separation Pay Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Separation Pay Agreement

"I need a Separation Pay Agreement for a senior executive in Saudi Arabia who will be leaving due to retirement on March 1, 2025, including provisions for a 6-month consulting arrangement and continued health benefits."

Document background
The Separation Pay Agreement is a critical document used when terminating employment relationships in Saudi Arabia, whether through mutual agreement, resignation, or termination by the employer. This document is essential for ensuring compliance with Saudi Labor Law and protecting both employer and employee interests during the separation process. It comprehensively outlines the final settlement, including statutory end-of-service benefits, outstanding salaries, and any additional compensations. The agreement typically becomes necessary when an employment relationship is ending and requires detailed documentation of the separation terms, financial settlements, and ongoing obligations. It must align with Saudi Arabian legal requirements, including those set by the Ministry of Human Resources and Social Development, and often serves as a crucial document for regulatory compliance and future reference.
Suggested Sections

1. Parties: Identification of the employer and employee, including full legal names and addresses

2. Background: Brief context of the employment relationship, including start date and reason for separation

3. Definitions: Key terms used throughout the agreement, including 'Termination Date', 'Final Settlement', etc.

4. Termination of Employment: Formal statement of employment termination, including the effective date and type of termination

5. Final Settlement Amount: Breakdown of all payments including salary, end-of-service benefits, and other entitlements

6. Payment Terms: Timeline and method of payment, including compliance with Wage Protection System requirements

7. Employee Obligations: Return of company property, handover requirements, and confidentiality obligations

8. Release and Waiver: Mutual release of claims and waiver of rights, subject to payment of agreed amounts

9. Tax and Regulatory Compliance: Statement on tax treatment and regulatory compliance with Saudi laws

10. Governing Law and Jurisdiction: Confirmation of Saudi law application and dispute resolution process

11. Entire Agreement: Standard clause confirming this agreement supersedes all prior agreements regarding the separation

12. Execution: Signature blocks and execution requirements

Optional Sections

1. Non-Compete and Non-Solicitation: Required when post-employment restrictions are being imposed on the employee

2. Continuing Benefits: Used when certain benefits (like health insurance) will continue post-employment

3. References: Include when parties agree on the content and format of employment references

4. Outplacement Services: Required when the employer is providing career transition support

5. Intellectual Property Rights: Needed for employees who created IP during employment

6. Cooperation in Transition: Used when employee's assistance is needed for knowledge transfer or handover

7. Surviving Obligations: Required when specific employment agreement obligations survive termination

Suggested Schedules

1. Schedule 1 - Calculation of Final Settlement: Detailed breakdown of end-of-service benefits, salary, and other payments

2. Schedule 2 - Company Property Checklist: List of items to be returned by the employee

3. Schedule 3 - Outstanding Obligations: List of any pending tasks, projects, or obligations to be completed

4. Appendix A - Statutory Entitlements: Summary of relevant Saudi Labor Law provisions regarding termination benefits

5. Appendix B - Release Form: Detailed release and waiver form in Arabic and English

6. Appendix C - Handover Plan: Detailed plan for knowledge transfer and handover of responsibilities

Authors

Alex Denne

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

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Relevant Industries

Banking and Financial Services

Technology

Manufacturing

Oil and Gas

Construction

Retail

Healthcare

Education

Professional Services

Telecommunications

Real Estate

Hospitality

Transportation and Logistics

Mining

Energy

Relevant Teams

Human Resources

Legal

Finance

Compliance

Payroll

Executive Leadership

Employee Relations

Operations

Administration

Relevant Roles

HR Director

HR Manager

Legal Counsel

Compliance Officer

Finance Director

Chief Financial Officer

HR Business Partner

Employee Relations Manager

Compensation and Benefits Manager

HR Operations Manager

Chief Executive Officer

Chief Operating Officer

Department Manager

Line Manager

General Counsel

HR Administrator

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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