Document background
The Severance Pay Non Compete Agreement is a critical document used when terminating employment relationships in Canadian jurisdictions, particularly for senior roles or positions with access to sensitive business information. It serves the dual purpose of providing financial security to the departing employee while protecting the employer's legitimate business interests. Recent legislative changes, especially in Ontario through the Working for Workers Act, 2021, have significantly impacted the enforceability of non-compete provisions, limiting their use primarily to executive-level positions and business sale scenarios. This agreement must carefully balance the statutory requirements for severance pay under provincial employment standards with the strict legal requirements for enforceable non-compete provisions under Canadian common law. The document typically includes detailed calculations of severance entitlements, specific restrictions on future employment activities, and provisions for confidentiality and non-solicitation.
