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Employment Release Agreement for Canada

Employment Release Agreement Template for Canada

A Canadian Employment Release Agreement is a legally binding document that formalizes the termination of an employment relationship and provides a comprehensive release of claims between an employer and employee. The agreement typically includes details of the severance package, continuing obligations, and mutual releases, while ensuring compliance with federal and provincial employment standards legislation. It serves to provide certainty and finality to both parties by documenting the terms of separation and preventing future legal claims, subject to Canadian employment law requirements regarding consideration, clarity, and fairness.

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What is a Employment Release Agreement?

The Employment Release Agreement is a crucial document used in Canadian employment law contexts when terminating an employment relationship, whether through mutual agreement, layoff, or other circumstances. It serves to document the final terms of separation, including severance payments, benefits continuation, and other post-employment obligations. The agreement must comply with both federal and provincial employment standards, including minimum notice periods and severance requirements. It typically includes comprehensive releases of claims, confidentiality provisions, and details about the treatment of various employment-related matters such as equity compensation and benefits. This document is particularly important for risk management and providing certainty to both parties regarding their rights and obligations post-employment.

What sections should be included in a Employment Release Agreement?

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

2. Background: Brief recitation of employment history, termination date, and context for the agreement

3. Definitions: Key terms used throughout the agreement, including 'Effective Date', 'Released Claims', etc.

4. Termination of Employment: Confirmation of employment end date and status of final payroll items

5. Consideration: Details of severance package, including payments, benefits continuation, and other valuable consideration

6. Release of Claims: Comprehensive release of known and unknown claims against the employer and related entities

7. Confidentiality: Obligations regarding non-disclosure of agreement terms and company confidential information

8. Return of Property: Requirements for returning company property and confirmation of compliance

9. Tax Matters: Treatment of payments for tax purposes and responsibilities of parties

10. Acknowledgements: Employee's confirmation of understanding, opportunity for legal counsel, and voluntary execution

11. Governing Law: Specification of applicable law and jurisdiction

12. Execution: Signature blocks and date of agreement

What sections are optional to include in a Employment Release Agreement?

1. Reference Letter: Terms regarding the provision of employment references, used when agreed as part of the settlement

2. Non-Disparagement: Mutual or one-way obligations not to make negative statements, included when reputation protection is important

3. Ongoing Cooperation: Requirements for employee assistance in transition or future matters, used when handover or future cooperation is needed

4. Stock Options/Equity: Treatment of outstanding equity compensation, included when employee has stock options or RSUs

5. Non-Competition: Post-employment competitive restrictions, used when protecting business interests is crucial and legally enforceable

6. Non-Solicitation: Restrictions on soliciting employees or customers, included when protecting business relationships is important

7. Reaffirmation of Prior Agreements: Continuation of existing confidentiality or IP agreements, used when prior agreements should survive

8. Outplacement Services: Terms of career transition support, included when provided as part of severance package

What schedules should be included in a Employment Release Agreement?

1. Schedule A - Severance Calculation: Detailed breakdown of severance payment calculations and payment schedule

2. Schedule B - Benefits Continuation Details: Specific terms and duration of continued benefits coverage

3. Schedule C - Outstanding Equity Awards: List of stock options, RSUs, or other equity compensation and their treatment

4. Schedule D - Company Property Checklist: Itemized list of company property to be returned

5. Appendix 1 - Reference Letter: Agreed form of employment reference letter, if applicable

6. Appendix 2 - Certificate of Independent Legal Advice: Confirmation of legal counsel review, if required

Authors

Alex Denne

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

Jurisdiction

Canada

Publisher

Ƶ

Cost

Free to use
Relevant legal definitions






























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Relevant Industries

Technology

Financial Services

Manufacturing

Retail

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Relevant Teams

Human Resources

Legal

Executive Leadership

Finance

Compensation and Benefits

Talent Management

Risk Management

Compliance

Employee Relations

Relevant Roles

Human Resources Director

Legal Counsel

HR Manager

Chief Human Resources Officer

Employment Lawyer

HR Business Partner

Compensation Specialist

HR Administrator

Chief Legal Officer

General Counsel

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Talent Management Director

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

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