The separation and release agreement is a professional contract that is given to the employees at the time of the termination of their employment for any reason and cause. It can be the employer who decides to let go the employee due to poor performance, the company may go bankrupt, there is downsizing in the company or the employee just decides to leave the company for a better opportunity in another company.
Brief Description of Separation and Release Agreement:
Other than small and local companies, the big and global organizations take the employee turnover very serious and these organizations are the ones that rarely face a law suit from a former employee as they take very good care of the employment termination process. Whether the employer or company wants to end the employment of a worker or the employee himself decides to leave the company for another job, it is mandatory in global organizations to present the separation and release agreement to the employee and ask him to sign it. The signed agreement is then used as a legal proof in case of any dispute or law suit against the company in future.
Here is preview of a Free Sample Separation and Release Agreement Template created using MS Word,
Key Elements to Add in the Separation and Release Agreement:
- Name of the employer/company
- Name of the employee who is leaving the company
- Reasons why the employee is leaving
- Terms and conditions of the agreement
- Mutually agreed clauses of the agreement
- Compensation for the employee
- Limitations of the employee for future employment
- Termination of the agreement
- Results of violation of the agreement
- Signature of employer and employee
Importance and Uses of Separation and Release Agreement:
Most of the time, when employer or company wants to let go an employee or terminate his employment due to any reason, this agreement is used but there are many companies that also use the agreement even if the employee is leaving the company by himself in order to pursue a better career in another company. The agreement is very important for many reasons but the most important reason is that when a company fires employee due to downsizing, it has to make sure that the employees are well compensated and they have enough funds to live easily until they find a new job. When such thing happens, employers ask the employees to sign this agreement and in return, they get good compensation. With this agreement, they employer has all the rights to fire the employee and even if the termination was wrong, once the agreement is signed, the employee can’t do anything or can’t take any legal steps against the company or employer. On the other hand, with this agreement in hands, the employee can present himself in a better way in front of a new employer. He can proof that there was downsizing in the company so he lost his job and besides that, there was nothing with his performance or professionals expertise to get the job done.