full and Final Release upon termination (ontario)
06Nov

What is a Full and Final Release Upon Termination

Ending an employment relationship can be stressful, whether through termination, layoff, or resignation. In many cases, employers will ask the departing employee to sign a full and final release.

What exactly does this document mean for you?

Should you sign as-is, negotiate the terms, or refuse altogether?

And how do Ontario courts treat these releases?

This article explains what a full and final release is, how it works in Ontario employment law, and what you should consider before signing one.

What Is a Full and Final Release?

A full and final release is a legal document signed at the end of employment. By signing it, you agree not to bring any future claims or legal action against your employer relating to your job or your termination.

Employers often include releases in termination or severance packages to close the door on potential disputes. Once you sign, you generally give up the right to pursue further compensation even if you later discover you had additional entitlements.

Key takeaway

Signing a full and final release in Ontario usually means you are giving up legal rights, sometimes rights you didn’t know you had. That makes it essential to fully understand the document before agreeing to it.

How Ontario Courts Treat Full and Final Releases

Two recent Ontario cases highlight the risks and realities employees face when presented with these agreements.

Preston v. Cervus Equipment Corporation (2024 ONCA 804, leave to SCC dismissed 2025)

The Ontario Court of Appeal upheld a broad release that included vested stock units even though those units were not part of the original claim.

The Court made it clear that

  • The plain wording of a release controls; courts will not “rewrite” it to make it seem fairer.
  • Broad language that expressly covers things like bonuses, stock units, or incentive plans will usually be enforced.
  • Independent legal advice strengthens enforceability and makes it harder to challenge a release later.
What this means for employees
  • If a release clearly states you are giving up rights to stock, bonuses, or other compensation, courts will generally enforce it even if the outcome feels unfair.

Timmins v. Artisan Cells (2024 ONSC 7123)

Here, an employer tried to make severance payments conditional on signing a release. The Court found this amounted to repudiation of the employment contract, meaning the employer effectively broke the contract first. As a result, the release could not be enforced.

What this means for employees
  • Employers cannot legally withhold amounts you are already entitled to unless you sign a release. If they do, you may have grounds to challenge both the termination package and the release.
Christopher Achkar - Employment Lawyer

As Christopher Achkar, employment lawyer and founder of Achkar Law, explains:

“A full and final release can close the door on future claims, sometimes permanently. Before signing, speak to a lawyer who can explain what you may be giving up.” 

What Makes a Release Enforceable or Not

From an employee perspective, a release is more likely to hold up in Ontario courts when:

  • It is clear and explicit, especially about what types of compensation you are giving up (as in Preston).
  • You had a reasonable opportunity to get independent legal advice before signing.
  • You received something beyond your Employment Standards Act minimum entitlements in exchange for the release.

A release may be challenged if

  • Your employer withheld contractual entitlements pending signature (as in Timmins).
  • You were pressured, rushed, or misled into signing.

Why Legal Advice Is Critical

Even if a termination package seems reasonable, hidden issues may exist.

An employment lawyer can

  • Identify whether the release goes too far in waiving your rights.
  • Ensure you’re not being asked to give up something you are already entitled to.
  • Negotiate better terms or more compensation before you sign.

Bottom line

Once you sign a full and final release in Ontario, it is extremely difficult to undo. Don’t take that risk without first understanding exactly what you’re giving up.

How Achkar Law Can Help

At Achkar Law, we guide employees through the complexities of termination and severance packages.

We review full and final releases, identify risks, and help you protect your rights before you sign away potential claims.

If you’ve been presented with a full and final release in Ontario, contact us today to ensure your best interests are protected.

employment law firm toronto - Achkar Law

The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Achkar Law Professional Corporation and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Achkar Law Professional Corporation. ©