How much time should an employer give a terminated employee to review the termination letter and release?
Question: How much time should an employer give a terminated employee to review the termination letter and release? Is there any liability if the employer knows the employee didn’t seek advice before signing?
Answer: The standard recommendation is to give an employee at least seven days to review a termination letter and release, although this time frame may vary depending on the circumstances. Most importantly, an employer should never require the employee to sign a release immediately after termination of the employee's employment. Such a requirement may lead to a finding that a release is unenforceable because the employee felt unduly pressured to sign it, due to the power imbalance between employer and employee. However, simply because an employee chooses not to exercise the option to take the time to review a release does not mean the release is automatically unenforceable. If the terms of a termination letter and release are fair, and the employer has offered the employee sufficient time to review them, the release and any settlement will likely be upheld. That said, best practice for employers is to advise employees to take the time needed to review the documents and give extensions of time limits for acceptance when asked. Where possible, employers should further advise employees that they will not accept a release signed during the termination meeting or immediately after termination of employment.
Independent legal advice is important, but an employee's failure to seek independent legal advice is not itself fatal to the enforceability of a release. The key consideration is whether the employee has been given the opportunity to seek independent legal advice, not whether the employee has actually exercised their right to obtain that advice. If the employee has not obtained independent legal advice, the employer should clearly explain the terms of the termination letter and release, answer any questions the employee has and give the employee sufficient time to consider whether or not to sign the release. As long as the employee understands and gives informed consent to surrender legal rights, a release will likely be valid and enforceable, regardless of whether the employee actually obtained independent legal advice.
Leah Schatz is a partner with MLT Aikins LLP in Saskatoon. She can be reached at (306) 975-7144 or [email protected].