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“Is my severance package fair?”

March 19, 2020 Special to MoneySense
"Is my severance package fair?"


Q. I have been offered a severance package that I do not believe is fair. I have worked with this company for 17 years and was given about half of what I think my severance should be. There is a date that specifies when the severance option runs out if I don’t accept it. Can my employer take away my severance if I don’t accept the offer? And what are next steps for me if I want a fairer deal/monetary package before I sign on the bottom line? I don’t want to be left with no job and no severance.
–Marina

A. I am asked this by just about every client who comes in to have me review a severance package with them.

Assuming that you are in Ontario, it probably makes sense to start by saying that within your offer, a portion of what you are being offered based upon your minimum statutory entitlements as defined by the Employment Standards Act. These minimums are non-negotiable. By minimum amounts, I mean that your offer cannot be less than these amounts. Typically, the package says something along the lines of if you do not accept our offer, we will pay you only the Employment Standards Act minimum amounts.

As to what you are entitled to beyond these minimum amounts, I’ll start by saying your rights are the same whether it is the day before their deadline or the day after their deadline, and employers know this.

The purpose of these deadlines is normally to get employees to address their severance offers in a timely manner—not that employers really think that they will get out of paying you because you didn’t get back to them within their requested four-day window.

I can’t promise you that your employer will not revoke their offer if you do not respond by their deadline, but I can tell you it doesn’t make much sense to do this. When I act for an employer in this situation, I normally tell them that revoking an offer like this just means that the employee will get a lawyer to pursue their entitlements, I will expend more time on their file to deal with the employee’s lawyer, and in the end the employer will end up paying what they offered at the beginning (assuming it was a reasonable offer) in addition to contributing something to the legal fees that have now been incurred by the employee and also paying the additional fees that they would have incurred from me as the matter dragged on.

If you want to play nice, which is always a good idea in a situation like this, just email your employer to let them know that you are considering the offer or trying to find a lawyer to get some legal advice and would like a brief extension. Most employers will not have an issue with this and it will give you some extra time to get legal advice without worrying about missing your deadline.

Scott Hawryliw is a civil litigation lawyer with SRH Litigation in Barrie, Ont. He helps clients with legal problems related to injuries, employment, and business issues and can be reached at [email protected]

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