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A Severance Agreement spells out the final terms when an employer and employee part ways. It's a legally binding contract that covers the payment package, benefits, and other support the worker receives after leaving their job. In Australia, these agreements often align with the Fair Work Act and National Employment Standards.

Beyond just setting out the money involved, these agreements typically include important rules about confidentiality, non-compete clauses, and the employee's promise not to sue the company later. They protect both sides by creating clear expectations and helping everyone move forward with confidence and legal certainty.

Consider using a Severance Agreement when ending employment relationships, particularly for senior executives, redundancies, or sensitive departures. These agreements prove especially valuable during company restructures, mergers, or when you need to protect confidential information and intellectual property after an employee leaves.

Australian businesses often use these agreements to prevent future legal disputes, maintain workplace harmony, and ensure compliance with Fair Work obligations. They're particularly important when offering above-standard termination benefits, managing potential unfair dismissal claims, or negotiating mutual separations where both parties want a clean, documented break.

• Severance Contract: Standard comprehensive agreement covering basic termination terms and conditions
• Severance Letter: Simplified format ideal for straightforward departures with standard terms
• Executive Separation Agreement: Enhanced version with additional protections for senior leadership exits
• Executive Severance Agreement: Specifically tailored for C-suite departures with complex compensation structures
• Independent Contractor Severance Agreement: Modified version addressing unique needs of contractor relationships

• Employers and HR Teams: Draft and oversee the agreement process, ensuring compliance with Fair Work obligations and internal policies
• Departing Employees: Review and negotiate terms, particularly regarding payment amounts, confidentiality obligations, and post-employment restrictions
• Employment Lawyers: Advise both parties on legal rights, draft or review agreements, and ensure enforceability under Australian law
• Union Representatives: May participate in negotiations for unionized employees, ensuring fair terms and compliance with enterprise agreements
• Company Directors: Approve significant severance packages, especially for senior executives or large-scale redundancies

• Employment Details: Gather accurate records of salary, tenure, leave balances, and any outstanding entitlements
• Termination Context: Document the reason for separation and any relevant performance or conduct records
• Payment Terms: Calculate severance pay, notice periods, and additional benefits following Fair Work guidelines
• Company Assets: List all company property to be returned, including devices, passwords, and access cards
• Confidentiality Scope: Identify specific trade secrets and sensitive information needing protection
• Template Selection: Use our platform to generate a legally-sound agreement that includes all required elements for Australian compliance

• Parties and Dates: Full legal names, positions, and effective termination date
• Payment Terms: Detailed breakdown of severance pay, notice periods, and statutory entitlements
• Release Clauses: Mutual release from future claims and legal actions
• Confidentiality Terms: Specific obligations regarding company information and trade secrets
• Post-Employment Restrictions: Non-compete and non-solicitation provisions that comply with Australian competition law
• Return of Property: Clear listing of company assets to be returned
• Compliance Statement: Reference to Fair Work Act and relevant awards or enterprise agreements
• Execution Requirements: Signature blocks with witness provisions and dating requirements

A Severance Agreement differs significantly from a Contractor Agreement in several key ways, though both deal with working relationships. While a Contractor Agreement establishes an ongoing independent business relationship, a Severance Agreement specifically handles the end of employment.

• Timing and Purpose: Severance Agreements come into play when ending employment relationships, while Contractor Agreements set terms for future work arrangements
• Legal Status: Severance Agreements involve employee entitlements under the Fair Work Act, whereas Contractor Agreements establish independent business relationships
• Payment Structure: Severance involves final payments and benefits, while Contractor Agreements outline ongoing service fees and deliverables
• Post-relationship Obligations: Severance focuses on confidentiality and non-compete after employment ends; Contractor Agreements manage intellectual property and work output during the engagement