So you’ve finally settled a dispute with a former employee who had alleged a wrongful dismissal or discrimination. You’ve drawn up the papers to confirm the fact that the matter is settled. Now, all you need are signatures on the dotted lines. Whose signatures exactly?
When settling a dispute with a former employee, the parties involved should sign the release – you know, those documents filled with legalese stating that that the employee/releasor releases the employer/releasee from all claims arising out of the employment relationship, termination thereof, et al. – to make the settlement legally binding. These signatories typically include the former employee and sometimes a representative from the employer, such as a human resources manager or CEO.
Someone needs to witness the parties’ signatures on the releases. We’ve run into several situations where one of the parties, typically the employee signing the release remotely, does not have someone who can witness their signature. The employer or employee is so keen on closing up the matter, they’re tempted to skip the witness signature altogether. If you’ve done all the work to resolve the matter though, why not make sure you tie up all loose ends properly?
Though there are cases in which releases that were not witnessed were still found to be valid, employers should ensure, as a best practice, to have a witness present when an employee signs an employment law-related release. This can provide crucial evidence in case of any disputes or challenges down the line. The witness can testify that the signature is authentic, that the employee signed the document voluntarily, and that they fully understood the terms of the agreement. This can help to protect your business from any claims of coercion, duress, or misunderstanding.
Who exactly should witness a party’s signature? Typically, a witness should be someone who is neutral and not involved in the dispute or the agreement. The release itself however may preclude the signing party from disclosing the facts of the settlement with anyone other than the party’s spouse and legal and financial advisors. This might restrict the list of available witnesses. If possible, the witness should be someone other than a representative of the employer, the involved lawyers, or financial advisors. Perhaps the release could be amended to allow for disclosure of the settlement to immediate family members as well as to expand the list of witnesses available.
As an employer, you always want to make sure that you’re covering your assets. And having a witnessed release is your best defence against any future legal woes. It’s like having a safety net in case there’s ever a challenge to the release.
Of course, if there is no dispute that the release is an authentic document, for instance, the fact that a signature on the release was not witnessed by a “neutral” party or at all at the time of signing will not necessarily invalidate the release. However, as an employer, you always want to make sure that you’re covered from all angles. Having a properly witnessed release is like having insurance – you hope you’ll never need it, but it’s good to have it just in case. So next time you’re getting ready to have an employee sign on the dotted line, make sure to invite a witness to the party. Trust us, your future business self will thank you.
If you need help drafting a release or have any disgruntled past employees, get in touch for a consultation.