Things to Watch for in a Severance Package

Terminated? Should you sign your Termination Package?

by Karen Zvulony, Toronto Employment Lawyer

Karen Zvulony, Employment LawyerHave you been terminated from your job and offered a severance package? Are you being asked to sign a termination agreement, Final Release, or severance agreement? Are you concerned whether your termination package is fair? I have compiled this List of Things to Look for in a Severance Package and What Terminated Employees need to Know to assist them in making the difficult decision of whether to sign. The information below is general information and should not be relied on legal advice.  I am happy to review your severance package if you would like personalized legal advice.


Employers will often provide terminated employees with only a few days to review the severance package offered and state that if the employee does not sign the offer by the unrealistic deadline unilaterally imposed by the employer, the offer will be null and void. This tight deadline typically causes the employee much anxiety and may force an employee to settle for less than they are legally entitled to. This is what the employer wants.

Do not be pressured to sign off on a severance package without having adequate time to consider the offer and have it reviewed by an employment lawyer.


The severance package should be reviewed by a lawyer that regularly deals with employment law.

It is crucial that the package be reviewed by an employment lawyer to ensure that the severance package comply with the minimum standards set forth in the Employment Standards Act or Canada Labour Code (depending on which one is applicable) and to ensure that the amount of severance being offered is consistent with the employee’s common law entitlements. The notice periods under the common law are generally longer than by statute and is determined based on factors such as the employee’s age, length of employment, the character of employment and the availability of similar employment.

The employment lawyer will also consider other factors, such as if the employee was recruited to leave secure employment, if the package is based on the employee’s total compensation and any other relevant factors.


Generally, an employee will have the option to accept the offer as is, try and negotiate with their employer for a better package, make a claim to the labour board or a claim for unjust dismissal (if applicable) or sue their employer in court for wrongful dismissal.  An employment lawyer is in the best position to advise the employee which option is best for them given their particular situation and provide a cost/benefit analysis of each option.