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You may have been working in the same job for a long time and believe that you are indispensable. For this reason, you probably don’t feel as if your role could be made redundant. You have progressively climbed your way up the ranks into a manager position and still perform above average in your annual performance reviews. You have been a key asset on a number of large projects, and feel that the large company you work for would never do wrong by you because of your contributions. Your relationship with your direct boss and those above him or her is great, and you’ve never felt concerned about losing your job.


All of a sudden, your manager walks into your office and tells you that you have been laid off. You don’t understand how you could have not realised this was coming, and wonder whether it was a last-minute decision. They provide you with reasons for the decision but none of them really make sense when you think back to how you have conducted yourself over the years. Upon being handed what you thought to be a Letter of Termination and signing at the footer of the document, you might not have considered the legal consequences of your actions.

In this scenario, it is not unheard of for employees to think they’re signing a Letter of Termination to later find out that what they had actually signed was in fact a Deed of Release. A Deed of Release is binding and sets out an agreement between the employer and employee following termination. It establishes the legal rights of each party with respect to one another that remain in place after the employee has been terminated, been made redundant or has voluntarily left. The Deed of Release typically includes monetary compensation as consideration for the employee’s promise to not bring legal proceedings against their ex-employer. The Deed can be used at a later date by the employer as evidence of a promise made by the former employee not to bring legal proceedings against them. A Court will usually disallow proceedings if the intention in the Deed of Release is clear and it was validly created.

What is included in a Deed of Release?

You will commonly find the following topics covered in a Deed of Release:

  • taxation;
  • severance package and pay;
  • restraint of trade clause;
  • statute that you are prevented from using against your employer;
  • a Statement of Service/Reference (usually upon request);
  • confidentiality clause; and
  • non-disparagement clause (ensures the parties to do not bad-mouth one another).

The non-disparagement clause is worth negotiating with your previous employer if it is not already featured in your Deed of Release/Termination Letter. Make sure your lawyer tends to this on your behalf so that you can more easily find employment without having a permanent mark on your record of employment.


In Part 2 we will be looking at the legal consequences of signing a Deed of Release, along with the various defences that you can bring against your employer to prevent them from enforcing the Deed against you. For more information and legal assistance from an experienced employment lawyer, contact LegalVision on 1300 544 755.


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