Do you expect to find a new job quickly?
An important factor when weighing the value of any severance offer made by an employer is whether you expect to find comparable re-employment quickly. The purpose of severance is commonly acknowledged as being a mechanism to tide employees over until they find new employment. As such, if you expect to secure a new job quickly after losing your old one, this may have the effect of reducing any severance obligation owing from your prior employer.
Consider the following example:
a worker is dismissed from their job and is owed at law a notice period (i.e. severance) of 6 months (having a potential value of up to $25,000.00);
the employer has only offered to pay the employee for 3 months (valued at $12,500.00); and
the employee is able to find a new job at the same rate of pay as the old job about 6 weeks after dismissal.
In this case, the employee would not automatically be entitled to receive a windfall (i.e. payment for a period of time from both the old and new employers). In fact, the old employer’s obligation to pay may end as of when employee starts new work at a comparable rate of pay (i.e. after 6 weeks). In circumstances such as this, it may make better sense to accept the severance offer provided by the old employer, rather than look to challenge it, and risk the employer reducing the offer in light of the employee’s newly-found employment. Conversely, if the same employee expects to struggle to find new work for the entire 6 month period, taking action to seek additional severance (either through negotiation or a court claim, depending on the circumstances) may be the better approach.
Assessing the impact of re-employment can be a complicated matter. Not all job offers you might receive post-dismissal will work to reduce your severance entitlements. Likewise, if you have a written contract that outlines set severance amounts that you are entitled to receive, it may be irrelevant if and when you find a new job.
Given these complicating factors, it is always best to seek legal advice from an employment lawyer to get a proper assessment of your severance rights.