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Deed of Release

How can this help me?

An employment deed of release is a binding, legal document that establishes an agreement between the employee and the employer following a termination of employment. A deed of release assures the employee of a guaranteed amount of compensation, in return for which the employee agrees not to bring any legal claims against the employer.

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What does it say?

While all employment deeds of release differ in content, there are a number of basic issues that most deeds of release address:

• the amount of severance pay which the employee is to receive
• the extent to which the severance pay is exempt from taxation
• tax indemnity for the employer
• post-termination restrictive covenants
• matters of confidentiality, such as business affairs, trade secrets and the terms of the agreement
• the employee’s agreement not to make derogatory statements about the employer, an agreement which is often mutual
• a list of statutes under which the employee is agreeing not to bring a claim against the employer
• assurances given by the employer and/or employee
• what reference the employer will give on behalf of the employee

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What are the benefits of a deed of release?

A deed of release offers benefits to both employees and employers. The employee benefits by knowing exactly how much severance pay they will receive. A legal claim, on the other hand, is fraught with uncertainty. The employer cannot know in advance how much compensation they will receive or even if their claim will be successful.

For the employer, a guarantee that they will not face any legal claims from the employee is a substantial benefit. It saves the employer time, money and the possibility of negative publicity.

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Do I have to sign?

No. There is no requirement that the employee sign a compromise agreement. You can refuse to sign and opt instead to maintain your right to bring a legal claim against the employer.

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Specialist Legal Advice

Our executive employment law solicitors deal with applications under the Fair Work Act 2009 and give advice on common law rights, contractual terms and unlawful dismissal which relates to failure to comply with the Workplace Relations Act 1996 including decisions based on trade union membership, family responsibilities, pregnancy, marital status, temporary absence from work due to illness and for discriminatory reasons such as gender, age and race or nationality. If you would like free advice just complete the contact form, or email our offices or use the helpline. Our executive employment law solicitors offer free initial advice without further obligation.