You’ve likely heard horror stories about employees suing their employers and getting thousands of dollars in court or tribunal awards for wrongful termination or breaches of human rights.
If you have to fire an employee, you should FIRST be talking to your dental lawyer about a legal document called a “Release” or “Release Agreement“. A well-drafted Release can save you time, headaches, and MONEY when you and an employee are parting ways.
Before presenting a Release, please be aware (among other things) that:
- you cannot withhold termination pay that is legally due to the employee if they do not sign the Release Agreement, but you can offer them an amount that is above what they are legally entitled in order to entice them to sign the Release Agreement;
- you cannot force the employee to sign the Release on the spot – you must give them time to consider the repercussions and to even consult a lawyer; and
- you cannot withhold other amounts which are due upon termination without cause;
5 Benefits of a Release Agreement
Here are 5 benefits of a properly drafted, presented and signed Release Agreement:
1. Settling Present Law Suits or Tribunal Complaints
If a law suit or tribunal complaint has already been commenced by the departing employee, then a Release can stipulate that such suits or complaints must be discharged by the departing employee in return for a certain amount of money.
2. Preventing Future Law Suits or Tribunal Complaints
The Release should state that the departing employee will not commence any new complaints or suits having to do with employment law or otherwise against the dentist employer. This should include human rights tribunal complaints.
The Release Agreement should also say that the Release Agreement and all aspects of the termination or events leading to the termination will be kept confidential by the departing employee. This is important when the departing employee still maintains friendships with others who remain employed at the practice.
Friends talk… but you don’t want them talking about the amount of money you paid an employee for termination, as a settlement or as an enticement to sign the Release Agreement.
When scorned employees are terminated, they sometimes feel the need to air their complaints about their former employer in the public domain. The non-disparagement clause will have the effect of stopping the departing employee from saying or publishing disparaging or deleterious remarks about the dental practice, its employees, directors, associates, patients, etc.
5. Consequences for Breaching the Terms of the Release Agreement
Finally, a well-drafted Release will set out consequences for breaching any aspect of the Release Agreement.
The recent case of Wong v. The Globe and Mail Inc. 2014 OSC 6372 is a good example of the importance of being specific about the consequences of breaching the terms of the Release. In this case Wong, a former employee of the Globe signed a release that stipulated that she would be getting about $200,000. In return for the money, Wong agreed to keep the agreement and the contents of the agreement confidential and failure to do so would result in her having to pay back all of the amounts paid to her.
A few years later, Wong published a book about her time at the Globe that included telling the readers that “I’d just been paid a pile of money to go away…”, ” Two weeks later a big fat cheque landed in my account”, etc. The Globe saw these comments as breaching the confidentiality portion of their agreement with Wong and asked her to return the amounts paid to her. In the end, Justice Nordheimer of the Divisional Court upheld an arbitrator’s finding that Wong had breached the non-disclosure portion of the agreement and she was obliged to pay the entire amount back to the Globe.
For further guidance and information on Release Agreements, you can contact our employment law team. We are your legal dental team.