It is very common that employees work in different companies for their entire professional career. Joining another company can only happen by leaving the previous employment and employer and when that happens, the professional relationship between employer and employee is severed. The severance agreement which is also known as the termination agreement is a professional document to include the terms on which the termination or severance is being conducted.
Brief Description of Severance Agreement:
When an employee is hired in a company, most companies ask new recruiters to sign a severance agreement at the beginning. This agreement allows the employers to take essential steps in order to fire the employee. There are also many companies that don’t ask employees to sign this agreement but they wait until it’s time to go through the termination process. When it’s time to lay off an employee due to any reason or when the employee decides to leave the company and join another organization, both the employee and employer need to go through a specific process which is included in the severance agreement.
For example, in the severance agreement, employer agrees to pay good compensation to the employee for firing him or give him two months so that he can find a new job and in return, the employee agrees not to sue the company for the termination without any reason. On the other hand, when the employee wants to leave a company, he offers to work for 1 more month so that the employer can find a substitute and in return, the employer gives good reference and remarks to the employee for his professional career in another company. This all is done on the severance agreement in which both parties include the terms and conditions that they want and with mutual agreement, they design the entire agreement that benefits both the employer and employee.
Here is preview of a Free Printable Severance Agreement Template created using MS Word,
Key Elements to Add in the Severance Agreement:
- Name of the employer/company
- Name of the employee who is leaving the company
- Reasons why the employee is leaving
- Terms and conditions of the agreement
- Mutually agreed clauses of the agreement
- Compensation for the employee
- Limitations of the employee for future employment
- Termination of the agreement
- Results of violation of the agreement
- Signature of employer and employee
Importance and uses of severance agreement:
When companies want to lay off employees or employees decide to leave the company without any specific reason besides getting better chances in another company, it can lead to a difficult situation in which the employee may sue the company for termination or the employer sues the employee for leaving the company before the employment contract ends. In order to make both parties happy, they sign the severance agreement in which both agrees to get what they want and offer something as compensation to the other party so they can both benefit from the break of the professional relationship between the employer and employee. This is a legal agreement and in case anyone violates it, the other party has the right to take it in court and use it as evidence.
Here is download link for the above shown Severance Agreement Template,
Related Word Templates
- Commission Sales Agreement Template Companies often prepare and sign an agreement with sales representative or agent to sale out their goods or products on commission basis is usually named as commission sales agreement. Sales commission can be described as a specified sum of money paid by company or business based on a percentage of the sales made by an employee or agent. Sales commission is distinguished from regular […]
- General Agreement Template An Agreement is a legal document that includes the responsibilities and obligations of two or more parties involved in a personal or business deal. It is better to get the responsibilities and duties in writing and ask the parties to sign the agreement rather than just trusting their words in the deal. You can either draft your own agreement by understanding the needs and requirements […]
- Professional Services Agreement Template When a company involves another company or services provider for professional services, the services agreement is signed by both parties i.e. company and service provider. This agreement benefits both the company and the service provider with their rights and responsibilities so that no one violates any terms and mutually agreed clauses in the agreement. Small companies prepare this […]
- Labor Contract Template A labor contract which is also called an employment contract is a document that defines the relationship between the employer and employee. This way they both have a clear knowledge of what they are supposed to do and what the other party requires from them. When a company hires an employee, the recruiter assumes some duties or responsibilities that the employee will perform at the job […]
- Joint Venture Agreement Template There are countless types are available to start a new business or company and one of them is joint venture. Joint venture is a business understanding in which two or more than two companies or business entities develop a new business entity to hunt their mutual benefits using shared capital and workforce etc. A joint venture business establishment normally involves a sharing of […]
- Assignment of Contributor Rights Agreement Template The contributor rights assignment agreement takes place between the person who contributes any material and the one who is the owner of the project in which material is being contributed by the contributor. As this is the assignment agreement, all rights relating to the contribution are transferred to the other party. Had it been a license, the contributor will transfer the rights […]
- Loan Agreement Template You may heard about loan agreements before, a loan is an agreement of borrowing money from the lender and then repay him after a specified time. The loan agreement may be in writing or in oral, the writing loan agreement is fully legal and it binds the borrower in the terms and conditions of loans. Loan agreements may be for persons, companies or group of companies and can have […]
- Affiliate Program Agreement Template An agreement is signed between two parties that are interested in forming a relationship. The relationship can with either be short term or long term. Short term can be less than a year and long term usually is more than a year. Such distinction is necessary before drafting an agreement because such ambiguities can result in stringent consequences for both of the parties involved. […]
- Monthly To Do List Template These days when everyone is busy working and developing their professional careers, no one has time to remember what they are supposed to do on the next day or even next week. In this situation, it is very difficult for you to remember what you are supposed to do on a specific date in the next month. There is no way you can remember a certain task that you will do on the 15th of the […]
- Employment Agency Agreement Template Before talking about the functioning and procedure of writing an employment agency agreement, it is necessary to elaborate the employment agency. A firm that provides employees to the employers and vice versa is usually called as employment agency. In third world countries there is no or minimal concept of employment agencies. But in developed part of the world, employment agencies are […]