I already accepted a severance package. What should I do?

What happens if I accept a severance package?

Unfortunately, once you put pen to paper and accept a severance offer or package (the terms of your termination), you eliminate your ability to negotiate a fair severance package. You can’t get more compensation from your employer.

If you wish to explore all of your options and entitlements after receiving notice of termination, do not sign any severance offer, termination papers or exit agreement provided by the company. Talk to an employment lawyer at Samfiru Tumarkin LLP in Ontario, Alberta or B.C. first to understand your rights.

Can I be forced to accept a severance offer before leaving?

Your employer can’t make you accept or sign off on a severance offer before you leave a termination meeting. They do not have the right to bar you from walking away with their offer to consider your options. The law permits you to review your termination paperwork without your employer placing unnecessary pressure on you.

You have up to two years from the moment you are fired to pursue a legal claim for severance pay.

Can I take back a severance offer after accepting it?

In most cases you can’t “take back” or cancel your acceptance of a severance offer once you have signed the release papers and submitted it to your employer. However, in some situations (such as being forced to sign paperwork under significant pressure from the company), that agreement may not be legally binding. An employment lawyer at our firm can examine your exit papers and the conditions you were placed under, and conclude if we can negotiate the correct amount of compensation for you.

Can my employer impose a deadline on a severance package offer?

Your employer can put a deadline on their severance offer, but you are not legally required to abide by it. If your employer has imposed a time limit on their severance package offer, your best course of action is to ignore it. Your legal rights to termination pay do not expire after 24 hours, 3 days, or even 2 weeks! Severance offer deadlines are a pressure tactic to make you accept less compensation than what you are actually owed.

WATCH: Employment lawyer Lior Samfiru talks about severance pay deadlines on an episode of the Employment Law Show.

How much severance pay am I entitled to?

More often than not, employers offer their employees the bare minimum severance package they are entitled to. Most employers anticipate that their employees are unaware of their employment rights, whether under a provincial Employment Standards Act (ESA) or Employment Standards Code (ESC), or common law. In other cases, employers are legitimately unaware of their obligations to workers during the termination process.

When reviewing a person’s complete severance package entitlements, it is crucial to do so using “common law” methods. Our court system determines what compensation a worker should receive once they have lost their job. If a non-unionized employee has been let go from their workplace without cause, the company has a legal obligation to provide them with proper severance pay, which may be up to 24 months. The factors used to determine the amount of reasonable notice owed include:

• Age
• Position
• Length of service
• Salary
• Experience and training
• Ability to find new employment

Use our helpful Severance Pay Calculator tool to determine your severance pay range.

WATCH: Employment lawyer Lior Samfiru explains key things you need to know about severance pay on an episode of the Employment Law Show.

Can I get severance if I already accepted a new job?

Severance pay is essentially your “insurance policy” to carry an employee over until they can find new employment. That being said, if an employee is making the same or more money in the new position, their earnings at the new job will effectively “cancel out” their severance pay. This happens the day they begin earning money in that new role.

If an employee is making less money in their new position, their former employer must cover any difference in income between the old job and the new one. This is to ensure that the employee is “made whole” for the notice period.

The impact of a new job on your severance package can depend on several factors, including whether or not your compensation occurred as a one-time “lump sum” payment or has taken the form of “salary continuance.” An employment lawyer at Samfiru Tumarkin LLP can help structure your compensation to best accommodate your unique situation and needs.

How long do I have to claim my severance?

Under common law, an employee has two years from the exact date of termination to pursue full severance pay from their former employer.

LEARN MORE
• Employment Contracts: What you need to know
• Common Employment Law Terms and Why they’re Important
• Wrongful Dismissal in Ontario