Deed of release advice

Legal advice on a deed of release

There are several factors for employees to consider before signing a deed of release or deed of separation. A deed of release may seek to limit your rights or may include terms that are more favourable to the employer, who would then be entitled to commence proceedings against you and seek damages for any breach. For these reasons, it is important to understand the consequences of signing the deed and whether its terms are fair and reasonable.

What is a deed of release?

A deed of release, sometimes referred to as a “separation deed”, “deed of settlement” or “release agreement”, is a legally binding document typically used when there has been a breakdown in the employment relationship and the parties wish to record an agreement to end the employment.

Once executed, the agreement acts as a bar from future legal proceedings, for example, making an unfair dismissal application under the Fair Work Act. In exchange for waiving the right to make any claims against the company, employees are usually offered an ex-gratia payment in addition to their statutory entitlements.

A deed of release might also be used following the commencement of legal proceedings in the Fair Work Commission or a court. Often when parties come to a settlement agreement in these circumstances, the terms of that agreement are contained within a deed of release.

What is in a deed of release?

In addition to monetary terms, a deed of release will generally include clauses relating to confidentiality, non-disparagement and a release from other claims.

Some future claims that an employee can bring which are not typically able to be excluded under a deed of release include claims for compulsory superannuation contributions or worker’s compensation.

A deed of release contains lasting obligations that can sometimes impact the rest of your professional career. If a particular provision is overlooked or poorly drafted, it can cause significant reputational damage and potentially restrain your conduct for years to come. An experienced employment lawyer will know what to look out for and be able to advise you on the terms, negotiating amendments and options available to you if you do not wish to sign the release agreement.