Deed of Release

What is a Deed of Release?

A Deed of Release is a useful tool to try and bring finalisation to a termination.

A Deed of Release is a signed document that seeks to ensure the following:

• The employee cannot subsequently sue the employer for unfair dismissal claims;
• The employee cannot misuse his or her employer's confidential information; and
• The terms of the termination remain confidential.

Can I force an employee to sign a Deed of Release?

In short, no. You cannot force an employee to sign a Deed of Release on the condition that you pay them their entitlements.

You can encourage them to sign it, if you are offering them something more than they would normally receive, such as an ex gratia payment. However you need to be aware that this could be viewed as coercion or unconconsionable conduct to prevent an employee from bringing a claim against you.

What happens if my Employee won’t sign a Deed of Release?

If the employee does not sign the Deed and the termination has not gone smoothly, then you should be on alert for a potential fair work proceeding.

You should make sure that all your paper work is in order. Remember they only have 21 days to bring an action, so you will want to get prepared. Call us immediately if you need advice.

What happens if my ex-employee breaches the Deed of Release?

If the ex-employee breaches the Deed of Release, then you are entitled to sue them for breach and seek damages.

Normally such a claim occurs when confidential information has been taken and used, and your business is now suffering.