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Severance Agreement


A severance agreement is between the employer and employee to set out the terms for payment of compensation to the employee upon termination of employment. The Agreement sets out the terms for severance amount, employment termination and general release of claims.

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Document Description

A severance agreement is a legally binding agreement between the employer and employee whereby the employer agrees to pay compensation to the employee upon termination of employment by the employer

This document comes into play when the parties are desirous of amicably terminating the employer-employee relationship for a severance amount payable by the Employer.

The agreement covers all the essential terms relating to the payment of severance amount; general release and discharge of liabilities; revocation period for the employee; confidentiality; non-disparagement; no admission of liability and termination of employment etc.

The Agreement requires the Employee not to disclose any of the details to any other third parties other than for enforcement. However, it shall also be noted that assignees and successors in the title of the parties shall be bound to this agreement.

The jurisdiction clause requires the parties to specify the particular jurisdiction that is responsible for handling this case, where the governing laws of that certain jurisdiction shall also be the governing laws that this agreement is bound to.

There is a Schedule 1 to the agreement wherein the Employee is required to provide a signed copy of the 'Declaration from the Employee's Independent Advisor'  confirming that the Employee received independent legal advice on the effect of the Severance agreement on the rights of the parties. This is will ensure that the Employee has a complete understanding of the terms and conditions of the Agreement and it cannot be invalidated on such grounds.

How to use this Document?


The Employee and the Company should carefully read this document.

This severance agreement may be used to record the terms of employee's termination and the payments to be made to the employee in return for a waiver of claims against the employer. 

Both parties should sign and return a copy, and once signed, both parties should get a copy. Both parties may wish to have their signatures witnessed to avoid any future disputes.


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