Severance Package Assessment

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negotiating severanceSeverance Packages are typically bittersweet. Offered during a lay off or reduction, they are intended to compensate the employee for their years with the company and to ensure that they remain financially stable until they are able to find re-employment.

At Monkhouse Law, we deal with many severance package situations wherein an employee has been offered sub-par compensation and/or benefits. Employers will sometimes offer an employee what is deemed “minimum notice” in accordance with the provisions of the Employment Standards Act, 2000 or the Canada Labour Code, or 8 weeks’ notice, saying that it is in accordance with the Ministry of Labour’s “Termination and Severance” guidelines.

However, these are just the minimums, to which of course an employer will comply, like the minimum wage, because otherwise charges might occur. See our article on how such minimums are often inappropriate.

Sealing agreement

The amount of severance, and benefits you are entitled to depends on several factors, namely your years at the company, your tenure, and your other benefits during employment (health benefits, of course, and also where applicable, bonuses and commissions)

It has been held that an employee is generally entitled to 3-5 weeks’ notice per year of service. Some courts have found that a month per year of service is an average of what is awarded, for instance see: Ryshpan v. Burns Fry Ltd., 1995 7278 (ON SC), but other elongating factors come into play.

Short term employees (less than one year) might get almost as much time as they worked in notice, if not more time.

With long term employees the court might find that the termination is effectively forced retirement and provide additional notice based on this.

Video: How to look at your Severance package

These reasons are why it is crucial to contact an Employment Lawyer when you are presented with a severance package. In order to ensure that such packages are not signed under distress, employers will typically provide you with a one week period to seek independent legal advice regarding the package. Take advantage of this to ensure that you are not getting less than you are entitled to.

Simply fill out the form below for a free callback from us in order to see if you should fight your severance package.