If you have been dismissed without cause and your employer has offered you a severance package, there is likely also a stated deadline by which you are asked to accept the offer or risk losing it.
It is important to not feel pressured to accept a severance package simply because your employer has imposed a deadline. In many cases, the deadline is arbitrary and intended to encourage a quick decision.
Before accepting a severance offer, take the time to understand your legal entitlements and determine whether the offer is fair. Here are some key points to keep in mind:
The deadline is often arbitrary. An employer's stated deadline does not necessarily mean the offer will automatically disappear if you do not accept by that date.
The deadline only matters if you intend to accept the offer. If you are not prepared to accept and instead wish to negotiate or make a counteroffer, the employer's deadline should not prevent you from doing so.
Do not feel rushed. A severance package can have significant financial consequences. Take the time you need to carefully consider the offer before signing a release. Before accepting, ensure you understand what you are legally entitled to receive, including termination pay, severance pay, benefits continuation, bonus entitlements, equity vesting, and any other compensation that may be owing. Also carefully review any terms being placed upon you as part of any offer (such as restrictions on solicitation, confidentiality, non-disparagement, and/or repayment requirements).
The money will likely remain available. While it is possible that an employer could withdraw an initial severance offer, this very rarely happens. There are two main reasons for this: your employer has already allocated the proposed funds to be issued to you; and suddenly revoking an offer can prove to be an imprudent and expensive business decision. It will likely exacerbate the situation (i.e. upset the employee) and increase the delta between what has been offered and what the law may require – thus making litigation far more likely.
You can request an extension. If you need more time to consider the offer, ask your employer to extend the deadline. There is nothing unreasonable about requesting sufficient time to obtain legal advice and make an informed decision. Moreover, your employer will want to be able to rely on any severance agreement having been reached voluntarily and without duress. Thus, generally, employers will allow additional time and avoid applying pressure.
Speak with an experienced employment lawyer before accepting. A severance offer is not necessarily the maximum amount you are entitled to receive. An experienced employment lawyer can assess your circumstances, explain your legal rights, determine whether the offer is reasonable and negotiate improved terms where appropriate.
Remember, you are not obligated to accept the first offer simply because your employer has given you a deadline. Take your time, understand your rights and make an informed decision.
For more information about assessing the fairness of your severance offer, see:
Our firm’s overview of how to review Severance Packages.
Our firm’s Severance Calculator.
Vey Willetts LLP is an Ottawa-based employment law boutique that provides timely and cost-effective legal advice to help employees and employers across Ontario resolve workplace issues. To speak with an employment lawyer, contact us at: 613-238-4430 or info@vwlawyers.ca.