- An employer offers a release because it wants certainty.
- Each of these clauses is common, but the specific wording varies a great deal between employers.
- Ontario law sets a statutory floor under every employment relationship through the Employment Standards Act, 2000.
When an employer ends your job in Ontario, the severance offer almost always comes wrapped around a release — a document you're asked to sign in exchange for the payment. Many people skim it, see a number they're happy with, and sign. That's a mistake, because what a severance release covers in Ontario is really the question of what rights you're giving up, not just what you're getting.
A release is a contract. Once you sign it and accept the money, you generally can't go back later and claim you were shortchanged, even if you later learn you were entitled to more. Understanding what each clause actually does — before you sign — is the only way to know whether the trade is a fair one.
This guide walks through a typical Ontario severance release clause by clause, so you know what you're agreeing to.
What a Release Is For
An employer offers a release because it wants certainty. In exchange for the payment on the table, the employer wants to close the door on any future claim you might bring — for wrongful dismissal, discrimination, unpaid wages, or anything else connected to your employment and its end.
The payment and the release are a package. You generally can't accept the money and refuse to sign, and you generally can't sign a heavily modified version without the employer agreeing to the changes.
Clause by Clause: What You're Giving Up
| Clause | What it typically does |
|---|---|
| General release of claims | Waives your right to sue over anything arising from your employment or its termination, known or unknown at the time of signing |
| Non-disparagement | Restricts negative comments about the employer, sometimes mutually |
| Confidentiality of terms | Prevents you from disclosing the settlement amount or terms, sometimes even to future employers |
| Return of property | Requires you to return devices, files, keys, and access cards |
| Resignation / non-admission | Frames the departure in specific terms and states the employer admits no wrongdoing |
| Cooperation clause | Requires reasonable cooperation with transition, handover, or ongoing matters |
| Tax indemnification | Shifts responsibility for the tax treatment of the payment onto you |
| Entire agreement clause | States the release document is the complete and final agreement between you and the employer |
Each of these clauses is common, but the specific wording varies a great deal between employers. A general release drafted broadly enough can capture claims you haven't even thought of yet.
What a Release Cannot Take Away
Ontario law sets a statutory floor under every employment relationship through the Employment Standards Act, 2000. A release cannot validly waive your entitlement to the ESA's minimum notice of termination, and — if you qualify — statutory severance pay. Even a signed release that purports to release "all claims" generally cannot cut you off from those specific statutory minimums.
That said, a release can — and usually does — validly waive your right to pursue a larger amount under the common-law "reasonable notice" standard, which is often more generous than the ESA floor. That's the real trade most people are making when they sign.
Red Flags Worth Reading Twice
- [ ] Does the release ask you to waive claims connected to something unrelated to your job loss (like a workplace injury or an ongoing dispute)?
- [ ] Is the confidentiality clause so broad it would stop you from discussing your own job search history?
- [ ] Does the deadline to sign feel rushed relative to the complexity of the document?
- [ ] Is there language suggesting the payment already includes your statutory ESA entitlements, without breaking out the amounts?
- [ ] Does the release ask you to confirm you had a chance to get independent legal advice, even though none was offered or paid for?
Frequently asked questions
Can I negotiate the wording of a release, not just the dollar amount?
Yes. Employers will often adjust clauses like non-disparagement, confidentiality, or the reference wording if asked, especially where you have some negotiating leverage. It's common to negotiate both the number and the terms together.
Does signing a release waive my right to Employment Insurance?
No. A severance release deals with your employer, not the federal Employment Insurance program. Severance payments can still affect the timing of EI benefits, which is a separate issue from what the release itself waives.
What happens if I refuse to sign?
If you don't sign, you generally don't receive the severance payment beyond your statutory minimums, and you keep your right to pursue a larger claim — but that usually means negotiating further or, if necessary, starting a legal claim.
Is a verbal promise from HR enforceable if it's not in the release?
Generally no. Most releases include an entire agreement clause stating the written document is the full deal, which is exactly why any promise you're relying on needs to be written into the release itself before you sign.
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