HR glossary · Ending employment and discipline

Release (full and final release)

A release is a signed agreement where a departing employee gives up future claims in exchange for a payment above what the law already requires.

Also called: full and final release, release agreement, separation agreement, settlement agreement

What release means

A full and final release is a document a departing employee signs, agreeing not to sue or bring claims against you over their employment or its end. In exchange, you give them something they are not already entitled to, usually money on top of the statutory minimum notice and severance.

Releases are common when an employer offers a package above the legal minimum. They give both sides certainty: the employee gets the money now, and you get a closed file. But a release only protects you if it is fair, clear and properly signed.

How it works

Pay the statutory minimums no matter what. Termination pay, severance pay where it applies, final wages and vacation pay are owed by law and must be paid on time whether or not the employee signs. You cannot make them conditional on a release. Employment standards are minimums, and an agreement to give less than the minimum is not valid.

The release has to be supported by something extra. Common examples are a lump sum above the statutory amount, a longer period of benefits, or a reference letter. If the employee only receives what the law already guarantees, the release may not hold up.

Make it understandable. Use plain language, list exactly what you are paying and when, and say which claims are being released. Give the employee reasonable time to read it, and suggest they get independent legal advice before signing. A release signed under pressure, in a rush or without understanding can be set aside.

Some rights cannot be signed away, or only in limited ways. A release may not stop an employee from filing an employment standards complaint for unpaid minimums or a human rights complaint, depending on the province and the facts. Have a lawyer draft or review the document, especially for long-service employees.

Is it the same in every province?

Releases are contracts, so the common-law rules on fairness and consideration apply across Canada, and Quebec's Civil Code governs them in Quebec. In every province and territory, an agreement cannot reduce employment standards minimums, so the statutory amounts must be paid regardless.

Example: A package at a Kingston software firm

Sam runs a 22-person software company in Kingston. He ends the job of a developer with 4 years' service. He pays her the Ontario minimum of 4 weeks' termination pay with her final pay, on time and with no conditions.

Separately, he offers 8 more weeks' pay and 3 months of extended benefits if she signs a full and final release. The letter gives her 10 days to decide and suggests she talk to a lawyer. She does, asks for a reference letter as well, and signs once that is added.

Employee records in the Staffkin HR Suite

Staffkin HR Suite employee records store documents such as a signed release and termination letter in the employee's profile alongside their job history.

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Questions about release

Can I make termination pay conditional on signing a release?

No. Statutory termination pay, severance pay and final pay are owed by law. A release can only be tied to something extra that the employee is not already entitled to.

Should the employee get legal advice before signing a release?

It is good practice to suggest it and give them time. A release signed in a rush or without understanding is more likely to be challenged.

Does a release stop an employment standards complaint?

Not always. Agreements cannot reduce statutory minimums, so an employee may still be able to complain about unpaid minimum entitlements.

Official sources

General information for Canadian employers, not legal advice. Rules differ by province and territory and change over time, so check with your provincial employment standards office (or the federal Labour Program if you are federally regulated) before you rely on it. See employment standards by province.

Checked against official sources on 4 November 2026.