Author: Ryan Carroll, LAW 365 Summer Student
An employment relationship could cease for a variety of reasons. An under discussed way for the relationship to cease is through an ex-gratia agreement. The agreement serves as one option for employers to get an employee to release themselves from any future legal claims they may have against them concerning their employment or their termination.
The benefit to this option is that it can be an effective negotiating tool. Rather than arguing for just cause or providing the minimum amount of notice or payment in lieu of notice, the ex-gratia agreement can be a less hostile way to end the employment relationship. The absence of hostility can ease the process toward ending the employment relationship
How the agreement is presented to the employee should be carefully considered. An assertion of just cause should likely be avoided as that can be found to be the basis of the firing and ultimately, lead to a wrongful dismissal claim. That consideration should not be taken to mean that employers cannot specify why they are displeased with the performance of the employee. This serves as the crucial feature of the release. The agreement allows the employer to note the specific reasons behind their discontent with the employee. Despite their discontent, the employer will provide the employee with a payment while admitting no liability. The statements made in the agreement could be used by the employee to determine if it would be best to accept the offer or force the employer to take more drastic measures including to formally dismiss them.
The agreement could be viewed as a benefit to both parties. Wrongful dismissal litigation can be costly and time consuming. Providing the employee with a compromise to avoid this situation could save money for both the employer and employee.
If you are currently experiencing an employment law issue, give us a call at (647)-494-9599 or email us at info@law365.ca
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