Severance Package Agreement
A Severance Package Agreement is signed agreement between an employer and the employee specifying the terms of benefits that an employee when he leaves employment or upon termination of work. The severance package agreement is usually considered an employer prerogative, a goodwill gesture of an employer to a departing employer or worker.
This agreement takes effect upon the termination of the employment contract or separation of the employee from the company. A severance package agreement is usually a part of the employment contract hence, in case of breach or violations, it can be enforced together with the other provisions violated by either party under the contract of employment.
Typically, to be entitled to a severance package, an employee must have complied first with the conditions set forth in the severance package agreement. The usual conditions for entitlement to severance package usually include the following:
- At least 5 to 10 years of service of to the company by the employee
- The separation of the employee must not have been brought about by the willful act or conduct of the employee such as indictment due to a crime committed
- That the employee’s separation or termination was not due to some valid ground or justifiable reasons for terminating an employee.
Other than these, other employment issues and concerns must also be considered when drafting a severance package agreement. A good severance package agreement must not only satisfy the employee’s welfare but also protect the interests of the employer.
Business Corporate Attorneys can help you draft and design a severance package agreement that can be incorporated in your employment contract, taking into considerations all the good aspects of a fair and effective agreement.