A deed of release is an important legal document that usually imposes three serious obligations on employees: to release the employer from all legal claims, to keep the matter confidential and not to say anything negative about your employer and its representatives. So if you are presented with one, should you sign it? Yes, if the terms are right, the money is right and you want to cut and run.
Most deeds will say something to the effect of “you agree these terms are fair and reasonable”. If the terms are fair and reasonable it may well be in your interest to sign the deed, generally we will consider the terms to be fair and reasonable if they are mutual. Meaning the obligations imposed on you are also imposed on your employer. Critically, you want to ensure that your employer and its representatives are required to keep all matters relating to the termination of your employment confidential and, are prevented from saying anything negative about you.
Workers compensation and superannuation rights cannot be contracted out of and you should ensure they are specifically excluded from the release from claims. You should also ensure that everything that has been promised to you or that you understand will happen is included clearly in the deed. Most deeds contain an “entire agreement” clause, which will say something like “this deed supersedes and replaces all previous agreements, representations and promises” – so if the deed doesn’t say it, you can’t rely on it.
The money will be right if you are receiving all of your award/agreement, contractual and statutory entitlements AND an additional benefit for releasing your employer from all claims. Usually if you are being asked to sign a deed you have already identified a claim or claims against your employer or, your employer has identified a claim or claims you might have and wants to protect itself. Before signing check: you are receiving the correct notice of termination, the correct redundancy pay (if you are being made redundant), the correct accrued leave, all wages owed to you – you can use this great free tool from the Fair Work Ombudsman to check those entitlements https://calculate.fairwork.gov.au/.
The quantum of the additional benefit really depends on the strength of your legal claims and your willingness to pursue them, instead of signing the deed. I like to think about it this way, how long is it likely to take you to find another job that is of equal status, seniority and pay? If the additional benefit compensates you for that period of time, it is probably reasonable.
You want to cut and run
When push comes to shove, most employees do not want to commence legal proceedings against their employer. That is completely fair enough, so if the terms are fair and reasonable, and the money is right, and you do not want to commence legal proceedings, go ahead and sign. Just make sure you are sure.