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A Severance Agreement is a legal contract between an employer and a departing employee that sets out the final terms when employment ends. It typically offers additional pay or benefits beyond what's legally required under NZ employment law, in exchange for the employee agreeing to certain conditions.

These agreements often include confidentiality clauses, non-compete restrictions, and protection against future legal claims. They're particularly common during restructures, redundancies, or when senior executives leave Kiwi companies. The agreement must comply with the Employment Relations Act and give employees reasonable time to seek independent advice before signing.

Consider using a Severance Agreement when ending employment relationships needs careful handling, especially during restructures or when parting ways with senior staff. These agreements prove particularly valuable when protecting company interests like trade secrets, client relationships, or sensitive operational details.

The agreement becomes essential when dealing with complex departures involving potential disputes, redundancy packages above statutory minimums, or situations requiring ongoing confidentiality. NZ employers often use them during management changes, when settling workplace grievances, or implementing significant organizational changes where clear documentation of departure terms helps prevent future complications.

• Employee Severance Agreement: Standard comprehensive agreement covering basic termination terms and benefits
• Voluntary Redundancy Settlement Agreement: Specifically for mutually agreed redundancy situations with enhanced benefits
• Severance Letter: Simplified format for straightforward departures with clear-cut terms
• Non Disparagement Employment Agreement: Focused on protecting company reputation during sensitive departures

• Employers: NZ companies, organisations, and business owners who initiate and draft the agreements, usually through their HR departments or legal teams
• Departing Employees: Staff members leaving the organisation who receive severance benefits in exchange for agreeing to specific terms
• Employment Lawyers: Provide advice to both parties, review terms, and ensure compliance with NZ employment law
• HR Professionals: Manage the process, coordinate between parties, and maintain proper documentation
• Union Representatives: Often involved in reviewing and negotiating terms for union members during redundancy situations

• Employment Details: Gather accurate information about salary, length of service, and existing benefits
• Termination Specifics: Document the exact reason for separation, last working day, and any agreed transition period
• Payment Terms: Calculate severance pay, outstanding leave, and any additional benefits or bonuses
• Company Assets: List all items for return including equipment, documents, and access credentials
• Compliance Check: Review against NZ employment law requirements and existing workplace policies
• Documentation: Using our platform ensures all mandatory elements are included in a legally sound format

• Party Details: Full legal names and addresses of employer and employee
• Payment Terms: Clear breakdown of severance amount, timing, and method of payment
• Confidentiality Clause: Specific obligations regarding company information and trade secrets
• Release of Claims: Employee's waiver of rights to future legal action under NZ law
• Return of Property: List of company assets to be returned
• Non-Disparagement: Mutual agreement to maintain professional communications
• Consideration Period: Statement confirming time given for independent advice
• Governing Law: Clear reference to New Zealand employment legislation

A Severance Agreement differs significantly from an Business Acquisition Agreement in several key aspects, though both involve significant transitions in business relationships. Let's explore the main differences:

• Primary Purpose: Severance Agreements focus on ending employment relationships and protecting both parties' interests, while Business Acquisition Agreements handle the complete transfer of business ownership or assets
• Scope of Terms: Severance Agreements typically cover final pay, benefits, and post-employment obligations. Business Acquisition Agreements address complex matters like asset valuation, warranties, and operational transition
• Duration of Effect: Severance Agreements usually have specific confidentiality and non-compete terms, while Business Acquisition Agreements create permanent transfers of ownership with ongoing obligations
• Legal Framework: Severance Agreements operate under NZ employment law, particularly the Employment Relations Act, while Business Acquisition Agreements fall under commercial and corporate law