02/2013 Employee and Union Relations HR Form
Sample termination letter with severance terms and conditions attached
[Date]
[Name]
[Address]
Re. Termination letter with severance terms and conditions
Dear XXXX:
It is with regret that we inform you that your employment with XXX is terminated effective [insert date].
We would encourage you to take advantage of the Career Transition program. This program is available to assist you in pursuit of alternate options for the future. Enclosed for your review is a package of information on the Career Transition Centre (CTC) services and facilities. The CTC is open 8 am to 4 pm, Monday through Friday. Please call [insert number] for further information.
Attached in appendix A, is a statement of your severance terms and conditions, benefit options, and Release of All Claims. Please review these carefully over the next few days with legal counsel if necessary, sign the forms where indicated, and return them to [insert name and title], Career Transition Centre [insert address], by [insert date].
We thank you for your past service and wish you the best in the future.
Yours truly,
Signature
[Insert name and title]
Instructions: The severance agreement should be a separate document attached to the termination as an appendix
Appendix A, Severance terms and conditions for [insert terminated employee's name]
All claims arising out of your termination from XXX on [insert date] are settled upon the following terms:
1. Compensation in lieu of notice
In lieu of statutory and common-law termination notice, you will receive a lump sum payment of [insert amount] (see Payment Options below).
2. Payment options
Your options for receipt of these funds are as follows:
a. Cash payment: [insert amount] (less Income Tax Deduction @ 30% and any other applicable deductions). For tax reasons, you may wish to split your severance amount into two payments.
b. It is our understanding that you can transfer up to [insert amount] of your lump sum payment to a Registered Retirement Savings Plan (RRSP). Transferring these funds to an RRSP will defer income tax that would otherwise be assessed on this portion of your severance payment. If you would like to take advantage of this option, please complete and return the attached TD2 Tax Form.
Please complete the enclosed Employment Transition Cash Payment sheet outlining the options you have chosen.
3. Variable pay
You will be eligible for prorated Variable Pay in accordance with the Variable Pay Plan. This will be determined according to your target award rate and the applicable component factors.
4. Payroll reconciliation
All amounts owing to you in respect of your employment up to and including [insert date] will be forwarded to you. An amount equivalent to any vacation entitlement accrued to [insert same date] will be paid to you less any statutory deductions.
5. Benefits and pensions
Any coverage under the provincial health plan will cease on [insert date]. Any coverage under Dental Plan or Extended Health Plan will cease on [insert date].
You may convert some of your employee life insurance to an individual policy in your name by [insert date] without providing medical evidence of insurability.
Any unused Life Balance Account credits, including personal well-being days, are forfeited effective [insert date].
With respect to your Health Care Spending Account (HCSA), expenses incurred on or prior to [insert date] can be reimbursed with your HCSA credits. Submission deadline for reimbursement is [insert date].
Your coverage under all other benefit plans will end on [insert date]. Your concession telephone will continue.
[Insert company name] retains the right to alter the Benefits Plans from time to time and at any time at its sole discretion. Any such alterations will apply generally to all [insert company name] employees participating in the plans.
You may call the Pension Department regarding your pension eligibility and entitlements.
6. Stock options
Any vested Team [company name] Options must be exercised within 90 days of [insert termination date]. Unvested options will immediately expire.
7. Company property
As is company policy, please make arrangements to return your security pass and other company materials in your possession to your manager by [insert termination date].
8. Confidentiality of intellectual property
All details of [insert company name] operations and its employees are proprietary and highly confidential. You agree not to disclose or use any such proprietary or confidential information.
9. Confidentiality agreement
You agree to keep the terms of this offer confidential and not disclose them to anyone other than your spouse, your legal representative or financial counsellor. Any breach of this condition may result in the offer being withdrawn.
10. Placement counselling
The services of the Career Transition Centre will be available to you. Please call [insert phone number] for further information.
The foregoing arrangements shall be binding upon you and your heirs, executors and administrators, and upon [insert company name] and its successors and assigns. These arrangements are open for acceptance by you until 4:00 p.m., [insert date]. If the foregoing accurately sets out your understanding of the arrangements between you and [insert company name], please indicate your agreement and acceptance by signing below where indicated and return it to [insert name, title and address].
Should you have any questions, please direct them to [insert name] at [insert phone number]
The foregoing is agreed to and accepted this ______day of ______, ______, (month), (year), in the city of ______, province of______, Canada
______
[Signature and insert name of terminated employee]
Please also sign the executed Release of All Claims.
Release
As consideration for the following:
(List here, in bulleted point, the termination notice, severance pay, extended benefits, or other valuable items you are agreeing to provide the employee upon termination of employment)
offered to me, (type in the name of the employee) by (type in the name of the company), I release and discharge (type in the name of the company), its successors, subsidiaries, employees, officers and directors (hereinafter referred to as "the Company") for all claims, liabilities, demands, and causes of action known or unknown, fixed or contingent, which I may have or claim to have against the Company as a result of this termination and do hereby agree not to file a lawsuit to assert such claims.
This includes but is not limited to claims arising under the Human Rights legislation, Employment Standards Act or other federal and provincial and/or territorial laws prohibiting employment discrimination or claims growing out of any legal restrictions on the Company's right to terminate its employees.
This release does not have any effect on any claim I may have against the Company unrelated to this termination.
I have carefully read and fully understand all of the provisions of this agreement and release, which sets forth the entire agreement between myself and the Company, and I acknowledge that I have not relied on any representation or statement, written or oral, not set forth in this document.
I have been given the opportunity to consult a lawyer or any other person of my choice, to discuss and thoroughly review and understand the release, before acting on it and prior to signing the release. I was given 30 days (type in the amount of days you wish to give or actually gave the employee) before I decided to accept the termination offer, and sign this release.
This release, unless signed by both parties, will expire as of (pick a date that coincides with the number of "consideration days" you chose in the above paragraph).
Signed: ______Date: ______
(employee)
Signed: ______Date: ______
(for the Company)
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