A voluntary departure program is an employer-initiated offer that allows employees to leave their job voluntarily in exchange for a defined severance package, buyout or other financial incentives.

These programs are commonly used during downsizing, restructuring or workforce reductions. They may also be called a voluntary separation program, voluntary exit program, employee buyout, voluntary severance program or early-retirement incentive.

The critical point is that accepting the offer usually means agreeing to end your employment on the terms proposed by your employer. Before accepting, compare the package with what you could potentially receive if you remain employed and are later terminated without cause.

⚠️ Don’t sign a voluntary departure agreement simply because the package is described as “enhanced” or because there is a deadline. Once you sign a release, you usually can’t seek additional compensation.

On This Page:

How Does a Voluntary Departure Program Work?

A voluntary departure program gives eligible employees a choice: remain employed or accept compensation in exchange for agreeing to leave.

An employer may offer the program to an entire workforce, a particular department, employees with a certain amount of service or another defined group.

Watch: What employees should know before accepting a voluntary departure or buyout package.

The offer can include:

  • A lump-sum severance payment
  • Salary continuation for a period of time
  • Continued health or dental benefits
  • Bonus or commission payments
  • Pension-related incentives
  • An early-retirement allowance
  • Outplacement or career-transition services
  • A reference or agreed wording about the departure

In return, the employer will normally require the employee to sign an agreement and release giving up the right to bring further claims connected with the employment or its termination.

Is voluntary departure the same as being fired?

No. A genuine voluntary departure normally means the employee has agreed to end the employment relationship, while a termination is initiated by the employer.

That distinction matters. If your employer terminates you without cause, you can have legal notice and severance rights. If you voluntarily accept a departure package, your compensation is generally determined by the agreement you accept.

However, the label is not everything. If the employer has effectively decided that your employment is ending, or you are being pressured to sign under circumstances that are not truly voluntary, the legal analysis can be different.

💡 A “voluntary” package should be assessed as a choice between two scenarios: what you receive if you accept now, and what your rights could be if you stay and the employer later terminates your employment.

How Do You Know If a Voluntary Departure Package Is Fair?

A fair voluntary departure package should be assessed against your likely legal and financial position if you do not accept it.

There is no standard voluntary departure formula. An offer of six months’ pay can be attractive for one employee and inadequate for another.

When reviewing the offer, consider:

  • Your potential severance: What could you receive if your employer later terminates you without cause?
  • Your age: Age can affect common-law reasonable notice and the ability to find comparable work.
  • Your length of service: Both short-service and long-service employees can have substantial termination rights.
  • Your position: Senior, specialized and difficult-to-replace positions can affect severance.
  • Your compensation: Salary is only part of the calculation. Bonuses, commissions, benefits and other compensation may matter.
  • Your employment contract: An enforceable termination provision can affect your rights.
  • Pension consequences: Leaving now can affect pension accrual, retirement eligibility or other long-term benefits.
  • Your chances of finding new work: Consider both the labour market and any restrictions in the exit agreement.

For many non-unionized employees, the appropriate comparison is not simply the minimum amount required by employment standards legislation. Common-law severance can be substantially greater and, in appropriate cases, can reach as much as 24 months’ pay.

Read our national guide to severance pay in Canada to understand the broader termination framework.

Does “enhanced severance” mean it is a good offer?

Not necessarily. “Enhanced,” “generous” and “special” are descriptions chosen by the employer, not legal measurements of whether the package is fair.

An employer might enhance its usual internal formula but still offer less than you could potentially receive following an involuntary termination.

Can you negotiate a voluntary departure package?

Sometimes. Even when a program is presented as standardized, it is worth determining whether any financial or non-financial terms can be improved.

Negotiable issues can include compensation, bonus treatment, benefit continuation, departure timing, reference wording, pension treatment or restrictive terms.

Whether negotiation is realistic depends on the program, the employee’s circumstances and the employer’s objectives.

What Happens If You Decline a Voluntary Departure Program?

If the program is genuinely voluntary, declining it normally means you remain employed unless and until the employer takes another lawful step.

You do not automatically lose your future severance rights because you rejected a buyout.

After the program closes, several things could happen:

  • Your employment continues normally
  • Your role or department survives the restructuring
  • Your employer later terminates you without cause
  • Your employer proposes different employment terms

If your employer later terminates your employment without cause, your termination and severance rights are assessed at that time based on the applicable law and your employment contract.

Can your employer fire you if you reject the package?

An employer can generally terminate a non-unionized employee without cause as part of a restructuring, provided it complies with the employee’s legal termination rights and the termination is not for an unlawful reason.

That is why declining a program is not necessarily risk-free—but neither is accepting it automatically the better choice.

The practical question is whether the voluntary package adequately compensates you for giving up the possibility of remaining employed and any termination rights you could have later.

⚠️ Don’t assume your employer has promised to keep you if you decline. Equally, don’t assume that declining means you will definitely be terminated. Ask what the employer is prepared to confirm in writing.

What if your employer pressures you to accept?

A voluntary departure should involve a genuine choice.

If you are told that you have no meaningful option, threatened with improper consequences, pressured to immediately resign or presented with substantially changed employment terms if you refuse, get legal advice before responding.

Can You Get EI After Accepting a Voluntary Departure Package?

You may qualify for Employment Insurance after a voluntary departure in certain workforce-reduction programs, but EI is not automatic.

EI is a federal government benefit and is separate from your employment-law severance rights.

Ordinarily, voluntarily leaving employment without just cause can prevent an employee from receiving regular EI benefits. However, federal EI rules specifically recognize qualifying employer workforce-reduction programs.

A voluntary departure can qualify under those rules where the employer has a documented workforce-reduction process and confirms that the employee’s departure actually preserved the job of a co-worker who otherwise would have been terminated.

Service Canada—not your employer—makes the final EI eligibility decision.

💡 Before accepting, ask the employer whether the program is being treated as an approved or documented workforce-reduction process for EI purposes and how your Record of Employment will describe the departure.

Does severance affect EI?

Severance and EI are separate, but separation payments can affect EI depending on the federal rules in effect when your claim starts.

Read our guide to EI and severance pay in Canada before assuming that receiving a departure package means you cannot apply for benefits.

💡 Current EI measure: For qualifying claims or allocations beginning between March 30, 2025 and October 10, 2026, federal temporary measures provide that separation earnings such as severance and pay in lieu of notice are not deducted from EI benefits. This is a temporary rule and should be rechecked for claims beginning after October 10, 2026.

What Should You Check Before Accepting a Voluntary Departure?

Before accepting, review the money, the release, your future rights and what happens if you say no.

1. The total financial package

Identify exactly what is being paid and why. Separate salary, severance, bonus, commission, vacation pay, pension-related amounts and other incentives.

2. The release

Most programs require a full and final release. Understand which employment, human rights or other claims you are giving up before signing.

3. Benefits

Confirm when health, dental, life insurance and other benefits end. Do not assume they continue for the same period as the cash payment.

4. Bonus, commission and equity

Determine what happens to unpaid commissions, annual bonuses, stock options, RSUs, PSUs or other incentive compensation.

5. Pension and retirement consequences

For long-service or older employees, the timing of departure can affect pension accrual, retirement eligibility and other benefits. Consider the value of what you are giving up by leaving earlier.

6. EI and the Record of Employment

Ask how the employer intends to document the departure and whether the program meets the federal workforce-reduction requirements relevant to EI. Learn more about Record of Employment (ROE).

7. Restrictions after you leave

Review confidentiality, non-solicitation, non-disparagement, rehire restrictions and any other obligations that continue after employment ends.

8. What happens if you decline

Ask whether your role is currently expected to continue and whether the company anticipates involuntary job reductions after the voluntary program closes.

⚠️ A program deadline can be real: the employer may withdraw the voluntary offer after it expires. Don’t ignore the deadline, but don’t let it pressure you into signing before you understand the consequences.

Voluntary Departure Programs in Ontario, Alberta and BC

The basic decision is similar across Ontario, Alberta and British Columbia: accepting a genuine voluntary departure usually means agreeing to leave on the offered terms, while an employer-initiated termination can trigger separate statutory and common-law rights.

The exact employment-standards minimums and terminology differ by province. Those minimums should not be confused with the full common-law severance rights that can apply to non-unionized employees.

Ontario

Ontario has separate statutory rules for termination pay and, for qualifying employees, ESA severance pay. Learn more in our guide to severance pay in Ontario.

Alberta

Alberta’s Employment Standards Code sets minimum termination notice or pay requirements, while many non-unionized employees can have greater rights at common law. See our guide to severance pay in Alberta.

British Columbia

BC’s Employment Standards Act refers to statutory termination compensation as compensation for length of service. Common-law severance can be much greater. Learn more about severance pay in BC.

Voluntary Departure Program: Frequently Asked Questions

Should I accept a voluntary departure package?

Accept only after comparing the offer with the value of remaining employed and your potential rights if your employer later terminates you. There is no universal answer because the quality of the package depends on your individual employment circumstances.

Is a voluntary departure package severance?

It can include severance, but a voluntary departure package is broader than ordinary termination compensation. It can also include incentives, pension-related amounts, benefits, bonuses or other payments offered in exchange for leaving voluntarily.

Do I have a legal right to a voluntary buyout?

Usually no. A voluntary departure program is generally an offer created by the employer, which can set eligibility rules and decide which employees may participate, subject to employment and human rights laws.

Can I take the voluntary package and start another job?

Often yes, but check the agreement first. Review any restrictions, salary-continuance terms, mitigation provisions, non-solicitation obligations or other conditions that could affect new employment.

What if I accept and later realize the package was too low?

If you signed a valid full and final release, it can be very difficult to pursue additional compensation afterward. That is why the best time to assess the package is before signing.

Can I get EI if I volunteer for a workforce reduction?

Potentially. Federal EI rules can allow benefits where the voluntary departure occurs under a documented employer workforce-reduction process and the departure preserves the employment of a co-worker who otherwise would have lost their job. Service Canada determines eligibility.

⚠️ Unionized? Voluntary departure, buyout and workforce-reduction rights can be governed by your collective agreement and must be addressed through your union. Samfiru Tumarkin LLP’s employment law team can’t assist with unionized workplace disputes.

Have Your Voluntary Departure Package Reviewed Before You Sign

A voluntary departure offer can be an attractive opportunity—but only if the compensation reflects what you are giving up.

Samfiru Tumarkin LLP helps non-unionized employees in Ontario, Alberta and British Columbia compare voluntary departure packages with their employment and severance rights.

We can review the offer, employment contract, release, compensation, benefits, pension issues and the likely consequences of accepting or declining the program.

Before you agree to leave, make sure the package makes sense for you—not just for your employer.

Offered a Voluntary Departure Package?

Before you accept and sign a release, compare the offer with your potential severance, benefits, pension and EI position.

Book Your Consultation