Termination Letter Template (Part 1): What is an Employee Termination Agreement

Please note that the information provided herein is not legal advice and is provided for informational and educational purposes only. If you are an employer or employee and need legal advice with respect to employee termination, you should seek professional assistance (e.g. make a post on Dynamic Lawyers). We have Toronto, Ottawa, Hamilton, Brampton, Mississauga and other Ontario lawyers registered to help you. You can contact me directly if you need a lawyer.

This is the first of a series of article posts I'm writing about employee termination. In this article, I'll briefly discuss what is an Employee Termination Agreement and how it can be structured. In the next article, I'll discuss some important elements of this Agreement.

What is an Employee Termination Letter?
An Employee Termination Agreement allows an Employer to terminate an individual's employment. It's simply not a good idea for an Employer to end that relationship by saying to an Employee: "you're being let go and we'll send you your final pay check in the mail". This could lead to costly and time-consuming litigation claims related to things like whether the termination pay was adequate, whether the method of termination was heavy-handed, or whether the Employee is able to compete against the former Employer. To help prevent these and other types of disputes from arising, an Employer should have an Employee Termination Agreement. It serves two main purposes for an Employer. First, it allows the Employer to settle any and all real or possible disputes with the Employee concerning the employment and termination thereof in exchange for payment. Second, it allows the Employer to require the Employee to agree to restrictive covenants such as non-compete and non-solicitation clauses. If the employment relationship was already governed by a written agreement which contained such clauses (such as the Employment Agreement that can be found here), it's still a good practice to have the Employee re-acknowledge these terms upon termination.

Structure of Employee Termination Letter
Various terms and conditions are typically included in an Employee Termination Agreement, such as:

* Introductory clause
* Background information
* Payment by Employer to Employee
* Release of Claims by Employee
* No Claims to be made by Employee
* No Assignment of Claims by Employee
* No Assistance by Employee
* No Admission of liability by Employer
* Non-Compete, Non-Solicitation, Non-Disparagement
* Restrictions Reasonable
* Injunctive Relief
* General Terms

By the way, if you need an Employment Agreement or Employee Termination Agreement, you've come to the right place. We have both! The Employee Termination Agreement can be used by an Employer to terminate an Employee's employment. It is drafted in favour of the Employer: it contains a release of liability, settlement of claims relating to the employment and termination thereof, and includes restrictive covenants (e.g. non compete and non solicitation clauses). If you're looking for an employment agreement, just go here. Both sell for only $47 and they come with video tutorials and 2 free written guides (the form and the written guides are lawyer-prepared).