What is Severance?
If you have been fired, in most cases, you are entitled to either reasonable notice of your dismissal / termination, or more often, pay in lieu of notice. This pay in lieu of notice is referred to as a “severance” payment.
What is a severance agreement?
If you are being fired without notice or cause, known as wrongful dismissal, in many cases your employer will have presented you with a severance agreement. The severance agreement will typically provide you with a severance package.
How much severance am I entitled to?
The severance package you receive should reflect the amount of money you would have earned had you been given “reasonable notice” of your termination. For instance, if you are fired on January 1st without notice, but 10 months’ notice of your dismissal / termination would have been “reasonable” in the circumstances, your severance package should be roughly equal to what you would have earned between January 1st and November 1st.
The determination of what is “reasonable” for each employee depends on your employment contract, legislation, and court cases. Usually, your age, length of service, difficulty of re-employability, level of responsibility, and income will be taken into account in calculating the period of reasonable notice. Reasonable notice usually falls within a range of 3-24 months and, as such, can be a very significant entitlement.
I think my employer has offered me a generous severance package
Your employer wants you to think that their first offer is a generous one. Do not be fooled – your employer wants you to sign away your right to sue. In the vast majority of cases, your employer’s first severance offer is not their best offer. The first offer is usually far less than you would be entitled to in Court.
My employer wants me to sign an exit/seperation package before I can receive my severance package
Do not sign any exit or separation agreement without speaking to an employment lawyer.
The terms of a severance agreement can be difficult to interpret. Your employer might include other onerous provisions in your severance agreement that can be difficult to spot. For instance, some severance agreements provide for a generous continuation of salary that cuts off once the employee secures another job and/or does not provide for continuation of your benefits or other perks during this period.
Additionally, most exit agreements require you to sign away your right to sue your employer for wrongful dismissal and other claims.
What can the employment lawyers at Levitt LLP do for me?
Levitt LLP’s employment lawyers are experts in employment law in Toronto, the GTA and across Canada. We have helped thousands of wrongfully dismissed employees negotiate severance packages – sometimes several times greater than what was originally offered in the termination letter.
We can help you understand what is being offered, and whether or not you can obtain more.
Your employer might not tell you, but you have an absolute right to consult with an employment lawyer and to protect your rights before signing. Don’t sign any severance agreement until you call one of our employment lawyers.
Each situation is unique; so schedule a consultation today with one of our employment lawyers in Toronto, the GTA or across Canada to learn about your options.
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