The Voluntary Redundancy Settlement Agreement is a crucial document used in South African employment law when an employee accepts a voluntary redundancy offer as part of a company's restructuring or downsizing process. This document is essential for both employers and employees as it provides legal certainty and protection by clearly documenting all aspects of the separation agreement, including financial terms, benefits, and mutual releases. It must comply with South African labour legislation, including the Labour Relations Act 66 of 1995 and the Basic Conditions of Employment Act 75 of 1997. The agreement is typically used during organizational restructuring, mergers and acquisitions, or economic downturns where workforce reduction is necessary but being handled through voluntary means rather than forced retrenchments.
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1. Parties: Identification of the employer and employee, including full legal names and details
2. Background: Context of the voluntary redundancy offer and acceptance, including relevant dates and circumstances
3. Definitions: Definitions of key terms used throughout the agreement
4. Voluntary Redundancy Acceptance: Formal statement of the employee's acceptance of voluntary redundancy and termination date
5. Severance Package: Detailed breakdown of the severance package, including basic severance pay, notice pay, and other entitlements
6. Payment Terms: Timing and method of all payments, including tax treatment
7. Leave Pay and Benefits: Settlement of accrued leave and treatment of existing benefits
8. Company Property: Requirements for return of company property and handling of company information
9. Confidentiality: Obligations regarding confidential information and trade secrets
10. Full and Final Settlement: Confirmation that the agreement represents full and final settlement of all claims
11. Tax Indemnity: Employee's acknowledgment of tax obligations and employer indemnity
12. Legal Advice: Confirmation that the employee had the opportunity to seek independent legal advice
13. Governing Law: Confirmation that South African law governs the agreement
14. Signatures: Execution provisions and signature blocks
1. Post-Employment Restrictions: Non-compete and non-solicitation clauses, if applicable to senior employees or those with access to sensitive information
2. Reference Provision: Terms regarding future employment references, if agreed
3. Outplacement Support: Details of any career transition services offered
4. Share Options/Long-Term Incentives: Treatment of existing share options or long-term incentive plans
5. Medical Aid Continuation: Provisions for continued medical coverage, if offered
6. International Benefits: Special provisions for expatriate employees or international benefits
7. Retirement Fund Provisions: Special arrangements regarding pension or provident fund benefits
8. Intellectual Property: Specific provisions regarding intellectual property created during employment
1. Schedule 1: Severance Calculation: Detailed calculation of the severance package including basic salary, notice period, and statutory requirements
2. Schedule 2: Benefits Summary: Comprehensive list of benefits and their treatment post-termination
3. Schedule 3: Company Property Register: List of company property to be returned
4. Schedule 4: Outstanding Loans and Advances: Details of any company loans or advances and their settlement
5. Appendix A: Statutory Declaration: Employee's statutory declaration confirming voluntary acceptance
6. Appendix B: Tax Directive Application: Copy of tax directive application for severance benefits
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