A deed of release is a signed document between an employer and employee which creates legally enforceable terms of a termination. The basis of the agreement is that the employer offers financial compensation in exchange for legal obligations.
Common terms within a deed of release include; the amount offered to the employee, confidentiality surrounding the termination, restrictions on the employee’s ability to sue the employer for unfair dismissal purposes and control on the use of the employer’s confidential information. A deed of release usually favours the employer as they restrict an employee from commencing legal proceedings.
An employee has the right to seek legal advice before signing the deed of release, and the ability to negotiate terms within the deed. If negotiated properly, a deed of release is more convenient for both parties and bypasses any further need for mediation or litigation. However, once the deed is signed, it becomes legally enforceable and both parties are bound by the terms within.