Document background
The Severance Contract serves as a critical document in Canadian employment law, used when terminating an employment relationship on a without-cause basis. It ensures compliance with minimum statutory requirements under both federal and provincial legislation while potentially incorporating more generous terms based on common law precedents and negotiated agreements. This document is typically used when an employer wishes to provide a clear framework for employment termination, including detailed severance calculations, benefit continuations, and mutual obligations. The contract addresses key aspects such as financial compensation, ongoing confidentiality requirements, and release of claims, while ensuring protection for both employer and employee interests. It must be carefully drafted to comply with applicable provincial employment standards and the Canada Labour Code, considering factors such as length of service, position, age, and local employment market conditions.
