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Is Your Severance Package Enough?

The worst has just happened. You have been fired.
They say its restructuring or downsizing or “without cause” … but, the reason doesn’t matter. You’ve been fired and your world comes to a crashing stop. What do you do now


You will walk out of the termination meeting feeling deflated and rejected. This is normal – but, be calm, collect your belongings and leave without signing anything. Your employer has no legal reason to demand you sign anything on termination – even if they say it’s to get your Employment Standards Act termination pay. Your employer cannot withhold this pay in exchange for your signature no matter what the employer says! Take your termination paperwork, get the contact details of whom you should speak to if there are any questions, and leave quietly.


Employment law is a complex area of law with overlapping requirements from various provincial statutes, like the Employment Standards Act, the Human Rights Code, Workers Compensation Act, and the courts prior decisions (common law). As a result, most initial offer severance packages are inadequate for the circumstances and employees are almost always owed more than they are being offered. An Employment Lawyer can leverage this knowledge to obtain the maximum amount you are entitled to on termination. Your employer has a lawyer – so why wouldn’t you?


In almost every case, the severance package provided to employees is inadequate. The courts in Canada have uniformly held that the Employment Standards Act outlines the minimum entitlements on termination. So, if your termination package only provides you Employment Standards Act amounts, you are likely owed much more.

Why? The Employment Standards Act (ESA) is only one piece of the puzzle when it comes to determining severance. The ESA strictly looks at how long you have worked for your employer, no other relevant factors are considered. Maybe you generated huge revenues for your employer, or you were a manager, or you are approaching retirement, or you don’t have a skillset to work elsewhere, or there are no jobs anywhere… all of these factors are relevant for determining appropriate severance, just not under the Employment Standards Act.

After the first 3 months of work, the ESA provides employees with 1 week of notice per year of employments, up to a maximum of 8 weeks. In other words, if you’ve had your job for 3 years, you get 3 weeks of notice; if you were employed for 22 years, you get 8 weeks of notice. 8 weeks is not much time in this post-pandemic economy to search for and secure a new job and start earning money again.

What about Employment Insurance? The maximum benefit under the Employment Insurance Act is $638 per week or $2,552 per month. Employment Insurance benefits run for up to 52 weeks and then end – regardless of whether you have a new job or not. Also, other leaves (such as maternity leave) may reduce the number of weeks you are entitled to. The other important piece of the puzzle when it comes to determining severance is the common law, which is the years of prior court decisions decided prior to your case that have established that severance should not be determined by length of service alone. The common law takes into account other relevant factors such as: your ability to find alternative employment, your age, skillset, managerial status, level of remuneration, expected retirement, etc. When considering these additional factors, the Courts have held that employees are generally entitled to an additional 2-5 weeks of notice per year of employment.

What this means is that if you have had your job for 3 years, you get 3 weeks of notice under the ESA, but up to 15 weeks of notice with the common law! If you were employed for 22 years, you get 8 weeks of notice under the ESA but up to 2 years (24 months) under the common law. An Employment Lawyer can get you closer to the numbers that the courts have held you deserve!

Ready to determine if your severance package is enough? Call Scott Chambers at Doak Shirreff Lawyers today to determine for a free severance package review. Risk-free billing options available to get you through this difficult time!

Scott Chambers, BA, JD, CPHR was an employment lawyer on Bay Street in Toronto representing some of the largest companies and charities in Canada before relocating to the BC Interior and focusing his practice on employee rights, particularly on termination. Scott can be reached at 1-800-661-4959 or at [email protected]