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Severance And Release Agreement Template for Canada

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Key Requirements PROMPT example:

Severance And Release Agreement

"I need a Severance and Release Agreement for our departing Chief Technology Officer who holds significant stock options and will receive an 18-month severance package, with the termination date set for March 1, 2025; the agreement needs to include strong non-compete provisions and detailed equity compensation treatment."

Document background
The Severance And Release Agreement is a critical document used in Canadian employment law context when terminating an employment relationship on a without-cause basis or as part of a negotiated departure. This agreement serves dual purposes: it outlines the complete severance package offered to the departing employee while securing a comprehensive release of potential legal claims against the employer. The document must comply with both federal and provincial employment standards, including minimum notice periods and severance pay requirements. It typically includes details about financial compensation, benefits continuation, equity compensation treatment, ongoing obligations, and various other terms that provide clarity and finality to the employment relationship. The agreement is particularly important in situations involving senior employees, sensitive departures, or when providing packages above statutory minimums.
Suggested Sections

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

2. Background: Brief history of employment relationship, termination date, and purpose of the agreement

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

4. Termination of Employment: Official statement of employment termination, including the effective date and nature of termination

5. Severance Payment: Details of severance amount, payment schedule, tax treatment, and statutory deductions

6. Release of Claims: Comprehensive release of legal claims by employee against employer and related entities

7. Continuing Obligations: Ongoing obligations regarding confidentiality and return of company property

8. Tax Implications: Statement regarding tax treatment of payments and employer's withholding obligations

9. Legal Advice: Acknowledgment that employee had opportunity to seek independent legal advice

10. General Provisions: Standard clauses including governing law, entire agreement, and severability

11. Execution: Signature blocks and date of agreement

Optional Sections

1. Non-Disparagement: Mutual or one-way obligations to refrain from making negative statements, used when reputation protection is important

2. Reference Letter: Terms regarding employment references and communication about departure, included when agreed upon

3. Benefits Continuation: Details of extended health benefits or insurance coverage, if offered beyond termination

4. Non-Competition/Non-Solicitation: Post-employment restrictions on competitive activities, used when protecting business interests is crucial

5. Outplacement Services: Details of career transition support if provided as part of severance package

6. Equity/Stock Options: Treatment of outstanding equity compensation, needed if employee has stock options or RSUs

7. Cooperation Clause: Agreement to assist with transition or future matters, used when ongoing cooperation might be needed

8. Reaffirmation: Requirement to reaffirm release at end of severance period, used for extended severance arrangements

Suggested Schedules

1. Schedule A - Severance Calculation: Detailed breakdown of severance payment calculation including salary, benefits, and other compensation elements

2. Schedule B - Outstanding Equity Details: List of stock options, RSUs, or other equity compensation and their treatment

3. Schedule C - Benefits Continuation Details: Specific information about extended benefits coverage and terms

4. Schedule D - Company Property Checklist: List of company property to be returned by the employee

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

6. Appendix 2 - Release Reaffirmation: Form of release reaffirmation to be signed at end of severance period if required

Authors

Alex Denne

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

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Relevant Industries

Technology

Financial Services

Manufacturing

Retail

Healthcare

Professional Services

Education

Energy

Mining

Transportation

Construction

Telecommunications

Media and Entertainment

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Non-Profit

Government Services

Consulting

Relevant Teams

Human Resources

Legal

Executive Leadership

Finance

Operations

Talent Management

Employee Relations

Compensation and Benefits

Risk Management

Compliance

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Operating Officer

Vice President

Director

Senior Manager

Manager

Human Resources Director

Human Resources Manager

Legal Counsel

Department Head

Regional Manager

Project Manager

Senior Professional

Executive Assistant

Sales Manager

Account Manager

Technical Lead

Senior Engineer

Financial Controller

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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