Employees will often be offered termination papers, a severance package, or a separation agreement when they are being let go from a job. Employers may require an employee to sign a release which states that they are not owed any additional severance or termination pay in exchange for the amount received under the agreement. But what happens if you don’t sign the termination papers? Read on to learn answers to frequently asked questions on this matter.
Why did I receive a termination offer?
When an employee is terminated without cause, they are entitled to a certain amount of severance pay, or pay in lieu of notice, to tide them over until they find another position. Often, the most recent employment contract states how much the person will be owed upon termination. The termination offer may be simply a re-hashing of this original agreement, or it may provide for some other amount.
If your employer is asking you to sign termination papers, it most likely means that you are being terminated without cause. If an employer has just cause for termination, they would not need you to sign anything.
When a person is terminated without cause, the employer has an obligation to provide a reasonable amount of working notice to the person to find another position. The amount of time that is reasonable would be determined by looking at similarly situated employees in previous cases and how difficult it would be for the individual in question to find a similar position. If a person does not get working notice, they are entitled to their regular pay for the same period in lieu of notice.
Your employer likely knows that you are entitled to a certain amount of pay for common law notice. The common law is law developed by judges by looking at similarly situated past cases and comparing those cases to the individual’s circumstances. You and your employer can contract to receive less than the common law notice either through the original employment agreement or through termination papers, sometimes also called a separation agreement.
A termination agreement cannot be for just any amount. At minimum, it must provide for the minimum standards set out in the Employment Standards Act. These amounts, however, can be quite low compared to common law entitlement.
Do you have to sign termination papers?
If you don’t sign termination papers, you must receive at minimum any amount stipulated in your most recent employment contract or the minimum amount set out in the Employment Standards Act, whichever is greater. If your employee fails to do this, you may be entitled to common law severance pay.
In other words, there is a certain amount that must be paid, whether or not you sign termination papers. You may also be entitled to more. How much you are ultimately entitled to depends on your individual circumstances. An employment lawyer can look to comparable cases to determine approximately how much you would be owed for termination pay.
Employees are owed at common law notice roughly between 3 to 5 weeks of pay per year of service depending on the particular circumstances. However, a judge will consider the individual’s circumstances such as age, seniority, and the worker’s ability to find a comparable position. For instance, Monkhouse Law successfully secured three months of termination pay for an employee who had worked for less than one year.
How to sign a termination letter
It is critical when signing a termination letter that you understand what you are signing away. While an employer can give you a deadline to sign for a specific package, they cannot require you to sign in order to receive your ESA minimum standards, anything agreed to in your employment contract, or your common law entitlements.
Before signing a termination letter, severance package, or separation agreement, it is prudent to seek independent legal advice from an employment lawyer. An employment lawyer can review the contract and explain exactly what you are agreeing to if you sign.
Importantly, a termination letter will generally include a “release” in which the employee agrees not to sue the employer for any more compensation. While these can be challenged, it will generally be easier to negotiate different terms for a severance package than fighting the agreement after the fact.
How do I respond to a termination letter?
Employees often misunderstand the termination letter, severance offer, or separation agreement as a take it or leave it offer. In reality, you can kindly thank your employer for the offer, speak to an employment lawyer, and respond with your own termination offer or negotiate different terms than what has already been offered. This is precisely the type of work that Monkhouse Law specializes in.
Whether you have received a termination letter that you have not signed or have already signed a termination letter, a quick free phone consultation with Monkhouse Law can help you plan out your next steps. An employment lawyer can assist in explaining the terms of a termination letter, draft a counteroffer, or represent you in challenging an unfair termination letter.
Employment Lawyers at Monkhouse Law specialize in Employment Law, Human Rights Law, and Disability Insurance Law. We serve employees, independent contractors and employers, and strive to get optimal results for every client through skilled advocacy and research on each matter. We have successfully represented clients before all levels of court in Ontario, including the Superior Court, the Divisional Appeals Court, and the Court of Appeal and have also appeared before the Supreme Court of Canada.