Full and final releases

Full and final releases

Youve just been fired from your job. You are still in shock. The human resources person is talking to you and you really do not understand what he or she is saying. More importantly, you dont care. You just want to get out of the meeting and go home.

It is often under circumstances like these that employees are offered the opportunity to sign a full and final release in exchange for a sum of money. All you have to do is sign it and well give you this cheque that has already been made out in your name says your boss. $20,000.00 is a lot of money and its more than youre entitled to. Just sign this release acknowledging that you received it, and the money will be yours. If you want to think about it you can, but we may change our minds and destroy this $20,000.00 cheque. Its up to you.

Good employers will do everything in their power to prevent an employee from being bullied into signing a full and final release without legal advice. Other employers will encourage employees to sign a release without getting legal advice so that they can close their file and move on.

In this article, I address reasons why employees need to obtain legal advice prior to signing a full and final release. My hope is that this article will be used as an educational tool for employees and employers.

Each employee or employer should seek a formal legal opinion from Gary Bennett at gary@bennettlaw.ca prior to implementing a strategy based on the information below.

What is a full and final release?

A full and final release is a legal document. In its most basic form it says that in exchange for receiving some amount of money and other things, the person who signs the release will not sue the company who is giving the money and things away. Releases are generally written in confusing language with run on sentences that last for a full paragraph. They are not designed to be understandable for the average employee who is forced to sign them. Many lawyers, quite frankly, do not understand some of the language in the releases that they send to their clients.

What is the purpose of a full and final release?

In the employment law context, releases are written to protect companies from being sued by the employee who they require to sign a release. They are never written to protect the employee who is signing the release. If anybody tells you that a release will protect you as an employee, dont believe it.

Who benefits from a full and final release?

Employers benefit when you sign a full and final release. A release is not signed for the benefit of the fired employee. When a fired employee signs the employers release, in most circumstances, that employee no longer has the right to enforce his or her rights as against that employer. A signed full and final release allows the employer to know that the dispute over firing the employee has been completed without the need for further negotiations or law suits.

Employees also benefit from signing a full and final release because they receive money and other items. Releases, when drafted properly, should specify what the fired employee will be receiving in exchange for signing the release. Sometimes the release will refer to a specific letter which sets out all of the money and things the employee will receive. Other times it will refer attached Minutes of Settlement which spell out the employees entitlements. If the full and final release does not spell out what the employee is getting, the employee should not sign it.

When should employees sign a full and final release?

If you have lost your job and your employer requires you to sign a full and final release, you should only do so after receiving legal advice from a labour and employment lawyer. It is important that you obtain legal advice from a lawyer who practices in the area of labour and employment law because this is a specialized area of the law. You would not ask your dentist to write you a prescription for reading glasses. In the same way, your real estate lawyer may not be properly equipped to evaluate your employment law concerns.

A labour and employment lawyer like Gary Bennett will be able to give you advice on the value of a signed full and final release to your employer. To borrow from my example above, often times, the $20,000.00 cheque your employer is offering you represents a small fraction of the $50,000.00 termination package you are entitled to. Without proper legal advice you could be signing away tens of thousands of dollars to your employer who just fired you. Most people I know do not want to do that.

Can I still sue if I sign a release before getting legal advice?

In general, once you sign a full and final release, you no longer have the right to make a legal complaint or commence a law suit against your former employer. Most standard full and final releases say that the employee acknowledges being given an opportunity to obtain independent legal advice prior to signing the document. This is why it is absolutely crucial that you obtain legal advice prior to signing a full and final release.

In some limited circumstances, it may be possible to make a legal complaint or commence a law suit against your former employer even though you signed a full and final release. For example, if your employer forced you to sign a full and final release under duress then it may not be held enforceable against you. Also, if you signed a full and final release but in exchange your employer provided you with less than your minimum entitlements under the law, the release may not be enforceable.

As a general rule of thumb, you should obtain legal advice prior to singing a release so that you do not give up your rights to obtain what is legally yours.

If employers or employees are concerned about what to put in a full and final release or whether to sign a full and final release, they should contact Gary Bennett at gary@bennettlaw.ca to book a consultation at his Mississauga law office prior to taking any steps.

Written by Gary A. Bennett
http://www.bennettlaw.ca

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