Deed · Employment & Workplace Relations
Deed of settlement and release on termination of employment, with payment and tax treatment checklist
A deed between an employer and a departing employee: agreed termination date, settlement payment, release of claims, confidentiality and non-disparagement, return of property, reference and withdrawal of proceedings, with a checklist splitting each payment into its tax category.
- Kind
- Deed. A deed that must be executed as a deed.
- Where it applies
- Australia, Commonwealth
- AI use
- Yellow AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at
- 18 October 2026
- Status
- Maintained. Checked on 18 October 2026 against the 3 authorities it cites, for Australia and Commonwealth.
- Version
- 1
- Source
- Written for this library
When to use it
Use to resolve a dispute about a dismissal or an agreed exit, including after an unfair dismissal or general protections application, or a without prejudice negotiation. Not a substitute for paying minimum entitlements, which must be paid whatever the deed says.
Used for these tasks
Each task page says how far AI may help with the task and what the lawyer must review.
How AI may be used
AI may fill the deed from the agreed terms and split the payments into the checklist categories from payroll data, but the lawyer settles the release and the payment characterisation, and the employer’s payroll or tax adviser confirms the withholding.
AI may
- Fill the deed from the agreed heads of terms and the employee’s payroll details
- Prepare the payment table separating wages, leave, notice, redundancy, ETP and compensation amounts, with the source for each figure
- Check that the release, confidentiality and withdrawal clauses match the proceedings and claims on foot
AI must not
- Must not characterise a payment for tax (genuine redundancy, ETP, compensation for personal injury) or decide withholding
- Must not draft terms that stop the employee from making a protected disclosure, reporting to a regulator or police, or claiming statutory entitlements that cannot be released
- Must not process the employee’s personal or health information in a tool that retains or trains on it
The lawyer checks
- Minimum entitlements (final wages, accrued leave, notice and NES redundancy pay where due) are paid in addition to, or clearly identified within, the settlement sum
- The release covers the claims intended, excludes what cannot lawfully be released, and the employee has had a real opportunity to get independent advice
- The tax characterisation of each payment is supported by the facts (for example, a genuine redundancy meets the ATO conditions) and checked by the payroll or tax adviser
- Proceedings are withdrawn by the agreed date, and confidentiality and non-disparagement are mutual where agreed and carve out protected disclosures
Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.
Read the full text
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- add it to your firm’s knowledge base, so colleagues can find it;
- let the AI tools you connect read it from that knowledge base.
The summary, the law it rests on and the AI-use guidance above stay public. Privacy.
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