| Termination Letter Template | | | | released from past, present, and future claims of |
| Please note that the information provided herein is | | | | any kind and in any forum whatsoever, but it also |
| not legal advice and is provided for informational | | | | wants its LEGAL REPRESENTATIVES released as |
| and educational purposes only. If you are an | | | | well. So who are these other persons? Well, |
| employer or employee and need legal advice with | | | | there's a whole bunch of different terms here |
| respect to employee termination, you should seek | | | | worth going over: |
| professional assistance (e.g. make a post on | | | | - Directors and Officers: these are individuals who |
| Dynamic Lawyers). We have Toronto, Ottawa, | | | | manage a corporation. |
| Hamilton, Brampton, Mississauga and other Ontario | | | | - Heirs: someone who would benefit (under the |
| lawyers registered to help you. You can contact | | | | law) when the Employer dies without a Will. |
| me directly if you need a lawyer. | | | | - Executors / Administrators: a person appointed |
| This is the second of a series of article posts I'm | | | | by a testator to carry out his or her will. |
| writing about employee termination. In this article, | | | | - Successors: typically used for corporations that |
| I'll briefly discuss some nuances that you should | | | | succeed and assume the obligations of other |
| be aware of when it comes to an Employee | | | | corporations |
| Termination Agreement. In the first article, I | | | | - Assigns: a person who receives the benefit of |
| reviewed what these agreements are and how | | | | an assignment, and can include individuals |
| they can be structured. | | | | andcorporations |
| Consideration | | | | As you can see, directors, officers, heirs, |
| Before getting into the nuts and bolts of a basic | | | | executors and administrator relate to individuals |
| Employee Termination Agreement, it is worth | | | | while successors and assigns can relate to both |
| discussing one important element that helps make | | | | individuals and corporations. Who exactly goes |
| these agreements valid and enforceable to begin | | | | into the release will depend on how the Employer |
| with. That element is called "Consideration". | | | | carries on business: is it a sole proprietor, |
| Consideration is something of value given by both | | | | partnership, corporation, etc.? If it's a |
| parties to a contract that induces them to enter | | | | corporation, it will have officers, directors, |
| into the agreement. Consideration is typically | | | | employees, etc. to act on its behalf, so they |
| something like money for goods or services, | | | | should be included in the release. For sole |
| etc. One party receives something of value and | | | | proprietorships, there won't be any officers or |
| the other party receives something of value. | | | | directors. |
| This makes the contract valid, binding, and | | | | No Claims, Assignment, Assistance, Admission |
| enforceable. For an Employee Termination | | | | In addition to getting an air-tight release for both |
| Agreement, the Consideration will be the money | | | | itself and other important persons, the Employer |
| that the Employer pays the Employee. This | | | | also wants to make sure that the Employee does |
| amount could reflect the common law (i.e. | | | | not do a few more things. First, the Employee |
| judge-made law) or statutory (i.e. Employment | | | | can't start or maintain any claims respecting the |
| Standards Act, 2000) requirements of minimum | | | | Released Claims. If he or she has started a claim |
| or reasonable payment in lieu of notice which the | | | | already, it would be wise on the part of the |
| Employer is required to provide when terminating | | | | Employer to put in a requirement that the claim |
| an Employee. In exchange for receiving this | | | | (and describe it as best as you can) be |
| money, the Employee agrees to settle all real and | | | | immediately released, cancelled, settled, etc. with |
| possible disputes and release all claims against the | | | | the court at the Employee's sole expense and |
| Employer relating to his or her employment and | | | | that proof thereof be provided immediately |
| termination thereof. | | | | thereafter to the satisfaction of the Employer. |
| Defining the "Released Claims" | | | | You can play around with the language but you |
| In the background section of the Employee | | | | get the point. Next, what if the Employee had |
| Termination Agreement, the Employer gets the | | | | previously assigned its rights to go after the |
| chance to describe the claims that are going to be | | | | Employer, for example, to a trustee in |
| settled and released. Typically, this will relate to | | | | bankruptcy? Well, the Employer will want the |
| claims that could arise from the Employee's | | | | Employee to give a representation that he or she |
| employment or way in which they were | | | | has not and will not assign his or her rights to be |
| terminated. This description becomes a defined | | | | able to go after the Employer. A full settlement |
| term – the "Released Claims" – for ease | | | | first means that the Employee is capable of |
| of reference to be used throughout the rest of | | | | settling (i.e. that he or she is entitled to go after |
| the Agreement. While the Employee will want to | | | | the Employer but that it will not because of the |
| have a narrow interpretation of the Released | | | | settlement). Next, the Employer wants and the |
| Claims (to help cast a wide net of liability on the | | | | Employee to acknowledge that it will not assist |
| Employer), the Employer will want a very broad | | | | any person in any claim respecting the Released |
| interpretation of the Released Claims (to help | | | | Claims. Remember: these are contractual terms |
| reduce the likelihood that the Employee will go | | | | so a breach of this term could result in damages |
| after it for future claims). | | | | being sought and awarded. Finally, the Employer |
| Payment | | | | wants the Employee to acknowledge that there is |
| The first part of the body of the Employee | | | | no admission of guilt or liability. In fact, the only |
| Termination Agreement typically says something | | | | thing being admitted here is that there is no such |
| to the effect that the Employee agrees to settle | | | | admission! |
| and release the Employer in respect of the | | | | In the next article, I'll continue my discussion of |
| Released Claims in exchange for money. Now, | | | | the various terms you can find in an Employee |
| here's where you can get a bit more detailed: | | | | Termination Agreement. |
| 1. When is the money to be paid (e.g. immediately | | | | By the way, if you need an Employment |
| after signing the agreement, within a set period of | | | | Agreement or Employee Termination Agreement, |
| time, promptly but in any event within a few | | | | you've come to the right place. We have both! |
| days, etc.)? | | | | The Employee Termination Agreement can be |
| 2. How is the money to be presented (e.g. cash, | | | | used by an Employer to terminate an Employee's |
| certified cheque, money order, personal cheque, | | | | employment. It is drafted in favour of the |
| readily available funds, etc.?) and paid (e.g. lump | | | | Employer: it contains a release of liability, |
| sum, over time, is there a deposit?) | | | | settlement of claims relating to the employment |
| 3. Are there any taxes involved that need to be | | | | and termination thereof, and includes restrictive |
| included in the settlement amount? | | | | covenants (e.g. non compete and non solicitation |
| Release of Claims | | | | clauses). If you're looking for an employment |
| So now that the Employee has his or her money | | | | agreement, just go here. Both sell for only $47 |
| and has agreed to settle the claims, the Employer | | | | and they come with video tutorials and 2 free |
| wants to have a bullet proof release of claims | | | | written guides (the form and the written guides |
| section. Not only does the Employer want to be | | | | are lawyer-prepared). |