The Mutual Release Agreement Employment is a critical document used in Canadian employment law contexts when an employment relationship is ending and both parties wish to achieve a clean break with certainty and finality. It is particularly useful following negotiated settlements of employment terminations, resignations with severance arrangements, or the resolution of workplace disputes. The agreement serves to document the mutual release of all claims between employer and employee, subject to Canadian federal and provincial employment standards and human rights legislation. It typically includes provisions for financial consideration, benefit continuations, confidentiality obligations, and non-disparagement commitments. This document is essential for risk management and providing legal certainty to both parties, ensuring that all potential claims arising from the employment relationship are addressed and released, while complying with Canadian legal requirements.
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1. Parties: Identification of all parties to the agreement, including full legal names and addresses
2. Background: Recitals explaining the context of the employment relationship, its termination, and the parties' desire to resolve all matters between them
3. Definitions: Key terms used throughout the agreement, including 'Claims', 'Released Parties', and specific terms relevant to the employment relationship
4. Consideration: Details of the consideration being provided by each party in exchange for the releases
5. Mutual Release: The core mutual releases where each party releases the other from all claims, with specific inclusions and exceptions
6. Confidentiality: Obligations regarding confidentiality of the agreement terms and any confidential information obtained during employment
7. Non-Disparagement: Mutual commitments not to make negative statements about the other party
8. Return of Property: Confirmation of return of all company property, documents, and data
9. Tax Indemnity: Provisions regarding tax treatment of any payments and related indemnifications
10. Enforcement: Terms regarding the enforcement of the agreement, including remedies for breach
11. General Provisions: Standard boilerplate clauses including governing law, entire agreement, severability, and amendment provisions
1. References: Terms regarding the provision of employment references, used when parties agree on specific reference terms
2. Ongoing Benefits: Details of any continued benefits coverage, used when post-termination benefits are part of the settlement
3. Equity Compensation: Treatment of stock options or other equity-based compensation, included when the employee had equity interests
4. Cooperation: Terms requiring future cooperation in legal matters or business transition, used when ongoing assistance may be needed
5. Non-Competition: Post-employment competitive restrictions, included when new non-compete terms are part of the settlement
6. Assignment of Intellectual Property: Confirmation of IP assignments and ongoing obligations, used when IP was created during employment
7. Insurance Claims: Specific provisions regarding insurance claims or coverage, used when insurance matters are relevant
8. Reinstatement Waiver: Explicit waiver of any right to reinstatement, used when there's risk of reinstatement claims
1. Schedule A - Settlement Payment Details: Itemized breakdown of all settlement payments and their characterization
2. Schedule B - Released Claims: Detailed list of specific claims being released, particularly useful for complex situations
3. Schedule C - Company Property: Itemized list of company property to be returned
4. Schedule D - Benefit Continuation Details: Specific details of any continued benefits, including duration and terms
5. Schedule E - Certificate of Independent Legal Advice: Confirmation that each party received independent legal advice
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