Deed of Release for Employment

This Deed of Release for Employment is for use when an Employee is leaving an Employer. It deals with final matters between both Parties. It can also serve to release both the Employer and the Employee from the various obligations that they have towards each other, such as obligations that might exist under the Employment Agreement.

Some obligations might continue after the termination of the Employment Agreement (and after the signing of this Deed of Release), such as obligations on the Employee to maintain the confidentiality of certain confidential information. At the same time, the Parties may require confirmation that some other obligations are at an end. For example, if the Employer is making a severance payment to the Employee, then the Employer may want confirmation from the Employee that such a payment will be accepted as full and final settlement of matters (and that the Employee will not therefore claim any other payment or compensation from the Employer).

The Deed of Release can record various details, such as:

• final payments (including severance payments, if applicable)
• confidentiality
• warranties
• return of property
• a release from further obligations
• an acknowledgement from the Parties that matters are finalised
• confirmation from the Parties that they have had the opportunity to obtain legal advice.

How to use this document

Use this Deed of Release (Employment) when an Employee is leaving an Employer. Record the various details of the final agreement between the Parties.

In order to prepare this Deed, it may be necessary to consult the Employment Agreement, any applicable modern award or enterprise agreement, or relevant employment laws. These may impose various obligations on the Parties, which cannot be avoided. If such a restriction applies in relation to a particular obligation, then even if this Deed confirms that a Party has been released from that obligation, the Deed may be unenforceable, and the Party may still be bound by that obligation. For example, in many states and territories, employment laws prevent the release of Employers from various obligations towards their Employees (such as obligations to pay workers compensation).

Once the Deed has been prepared, both Parties may take a copy (before it is signed) and review it to ensure that they understand the Deed and are happy with the terms of it.

Importantly, it is worth noting that this Deed serves to "release" the Parties from some of their respective obligations. Therefore, in respect of a particular obligation, the Party which is "releasing" the other Party, is effectively giving up some of their legal rights.

This should not be done without careful consideration. Both Parties should make sure that they understand the consequences of this. If they have any doubt, they should seek independent legal advice. Because of this, the Deed also includes a clause confirming that the Parties have had the opportunity to obtain legal advice (and either took that advice, or chose not to obtain advice). If either Party has not had the opportunity to obtain legal advice, then they should not sign the Deed.

There are certain formal requirements that need to be met in order for a Deed to be validly signed. This Deed will need to be signed in accordance with those formal requirements, or it may not be legally binding. For example, for an individual to validly sign a Deed, the signature clause should read "Signed Sealed and Delivered" and they should sign it before an independent adult witness, who also provides their full name and signature. The rules regarding the signing of Deeds by companies are set out in the Corporations Act 2001, and generally require the Deed to be signed by two directors, or by a director and the secretary or in the event that the company has a sole director who is also the secretary, by that person.

Again, if the Parties are unsure about this, they should seek legal advice. If the Parties get this wrong, the Deed may not be legally binding.

Applicable law

The Fair Work Act 2009 (Cth) contains the National Employment Standards (NES), which set minimum employment standards in Australia.

In addition, each state and territory has legislation that deals with various employment matters such as occupational health and safety or discrimination.

If a modern award or enterprise agreement applies, then this will need to be consulted.

Each state and territory has legislation that addresses the formalities that apply to the signing of deeds by individuals. In addition, the Corporations Act 2001 (Cth) deals with the signing of deeds by companies.

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