Make certain that prior to the point at which the employment offer is made, the prospective candidate has receipt of any offer letter, contract, agreement or otherwise that is being relied upon to comprise the terms of employment. This will avoid any confusion, or worse, misrepresentation that goes to the terms of the offer.

The prospective candidate should always be encouraged to obtain independent legal advice or at the very least, be given ample time to consider the nature of the contract. A clear case of duress is a recipe for disaster when it comes to a severance limiting provision.

Even if the employee has received appropriate counsel, care should be taken to point out the meaning of the more sophisticated terms, and draw the employee’s attention to the fact of a severance limiting provision. The individual presenting the offer should document this conversation.

The employee must always execute the employment agreement prior to the point at which employment commences. Reciprocally, if re-negotiating the terms of an existing employee’s position, fresh consideration (some compensation or other benefit) must be provided to the employee.

Severance limiting language must be clear and unambiguous. A small degree of uncertainty is a prescription for courts to interfere with the bargain an employer though it had made.

The termination provision must provide the employee with the minimum amount of severance provided by the governing legislation. In Ontario, the Employment Standards Act, 2000 sets out a ladder of minimum severance payments for any dismissed employee. The legislation should be specifically and clearly referenced in the contract itself.

An otherwise valid contract can be struck down as unconscionable or unreasonable. While the Employment Standard Act, 2000 is a great starting point, employers should renegotiate greater amounts of severance as employees gain tenure or increased value with the organization.

Contracts should include a severability provision ensuring that if one aspect of the contract is struck down as unenforceable, the remaining terms of the contract will survive.