How to Negotiate a Severance Package in Ontario

If you have just been let go from your job, your employer likely handed you a termination letter, a severance offer, and a deadline. They may have told you the package is “standard,” “generous,” or that it is the best they can do.

Here is the truth: An employer’s first severance offer is almost never their best offer, and it is rarely the full amount you are legally owed. Most non-unionized employees in Ontario are offered the bare minimum required by the government. Meanwhile, their true legal entitlements under Ontario common law are often worth tens of thousands of dollars more. Negotiating your severance package is the only way to bridge that gap.

However, taking on your employer’s legal and HR departments by yourself is incredibly risky. Before you attempt to negotiate—and definitely before you sign any paperwork—you need to understand how the severance negotiation process works in Ontario.

On This Page:

• 1. Can You Negotiate Severance in Ontario?
• 2. What to Do When Handed Severance
• 3. Already Signed a Package?
• 4. Why Hire an Employment Lawyer
• 5. How to Get What You’re Owed

Can You Negotiate Severance in Ontario?

Yes. In Canada, most non-unionized employees can, and should, negotiate their severance package after being terminated without cause.

Employers actually expect you to negotiate. They frequently start with a lowball offer, assuming that you do not know your full legal rights and hoping that the financial shock of losing your job will pressure you into signing quickly.

Why the Initial Offer is Usually Too Low

When calculating your initial offer, your employer is likely relying on the minimums set out by the Ontario Employment Standards Act (ESA). The ESA strictly caps termination and severance pay, maxing out at a combined 34 weeks for only the most senior employees.

However, your true entitlement is based on Common Law Severance. Under common law, courts calculate your severance based on the “Bardal factors” (your age, length of service, and the seniority of your position). Common law severance has no strict statutory cap and can provide up to 24 months of full pay, depending on your circumstances.

The entire goal of a severance negotiation is to force your employer to abandon the ESA minimums and pay you the common law maximums instead.

What to Do When Handed a Severance Package

If you are sitting in a termination meeting or have just received a severance offer via email, how you react in the first 48 hours is critical to a successful negotiation. Follow these steps:

Step 1: Do Not Sign Anything Immediately

Your employer can’t legally force you to sign a severance offer or a release before leaving a termination meeting. They can’t bar the door, and they can’t withhold your final paycheck or your ESA minimums to “starve you out.” You have the absolute legal right to take the paperwork home to review it.

Step 2: Ignore Arbitrary “Deadlines”

Employers frequently place aggressive deadlines on severance offers (e.g., “You have until Friday at 5:00 PM to accept this offer, or it will be revoked”). This is a pressure tactic. Under Ontario law, you actually have up to two years from the date of your termination to pursue a legal claim for full severance pay. Do not let a fake deadline panic you into making a bad financial decision.

Step 3: Do Not Resign

If an employer offers you a package but suggests it would look better on your resume if you simply “resigned,” refuse. Quitting your job generally eliminates your right to severance pay and makes it incredibly difficult to collect Employment Insurance (EI).

Step 4: Calculate Your True Common Law Entitlements

Before you can negotiate, you need to know what your case is actually worth.

I Already Signed My Severance Package. What Should I Do?

We frequently hear from employees who gave in to their employer’s pressure tactics, signed the release, and later realized they were owed thousands of dollars more.

Can you take back a severance offer after accepting it?

In most cases, no. Once you put pen to paper and accept a severance offer, you eliminate your ability to negotiate. A signed release is a legally binding contract that protects the employer from further legal action.

There are extremely rare exceptions where a signed release can be overturned by a court—such as if you signed it under extreme duress, or if you lacked the mental capacity to understand the contract at the time of signing. However, “duress” is a very high legal bar to clear. Being stressed about losing your job does not qualify.

This is why it is absolutely critical to never sign termination papers until a lawyer has reviewed them.

Why You Should Hire an Employment Lawyer to Negotiate

You are not legally required to have a lawyer to negotiate your severance. However, attempting to negotiate on your own is playing right into your employer’s hands. Here is why you need an Ontario employment lawyer in your corner:

1. Employers Have Lawyers: Your employer had a corporate lawyer draft the termination clause in your employment contract and the release they are asking you to sign. You need an expert to find the loopholes in their paperwork.
2. We Know What “Fair” Looks Like: Employees often ask for one or two extra weeks of pay, thinking they secured a “win.” An employment lawyer knows when to ask for an extra six months of pay based on the latest Ontario court precedents.
3. We Protect Your Total Compensation: Negotiating isn’t just about your base salary. We ensure your bonuses, commissions, pension contributions, and extended health benefits are protected during your notice period.
4. We Handle the Stress: Losing your job is exhausting. When you hire us, we take over all communications with your former employer. You don’t have to speak to HR again.

Will Negotiating Send Me to Court?

Many employees are terrified that asking for more money means engaging in a bitter, years-long lawsuit. This is a myth.

Employers do not want to go to court any more than you do. Litigation is expensive, public, and time-consuming. When a respected employment law firm steps in and clearly outlines the employer’s legal exposure, the vast majority of cases settle quickly. At Samfiru Tumarkin LLP, over 99% of our employment cases are resolved successfully through negotiation or mediation, without our clients ever stepping foot inside a courtroom.

Secure Your Financial Future Today

Don’t let your employer dictate your financial future. If you have been offered a severance package, the employment lawyers at Samfiru Tumarkin LLP can cut through the jargon and secure the compensation you deserve.

As Canada’s largest and most positively reviewed employee-side employment law firm, we have the experience and the leverage to turn minimum ESA offers into maximum common law payouts.

Contact Samfiru Tumarkin LLP Today

Time is of the essence. Let us review your package today.