How Severance Package Lawyers Review Your Severance Pay?
A person’s job represents something so fundamental to their day-to-day life and sense of purpose that if they are let go from their place of employment it naturally leaves them in a position of uncertainty about what lies ahead. The first step for most who have their employment terminated is to assess/review the severance package that their employer offered them.
Severance package lawyers are able to assess a person’s severance pay and determine whether it is fair through a few key steps. First, the employment lawyer will look at the person’s written employment contract, if applicable, to determine if the contract states what that person is entitled to if they are let go. In reviewing the contract, lawyers will not only be looking to see if the contract specifies what the person is entitled to, but a good severance package lawyer will also be able to determine if the language in the contract is legally enforceable.
If the person does not have a written employment contract, if the contract does not specify the person’s entitlements upon termination, or if the contract’s language is unenforceable a severance package lawyer will then look at the person’s individual circumstances to determine what a court would likely award that person. Courts use factors such as the person’s length of service with that employer, their current age, and the type of work they performed to determine the appropriate severance period for that individual. Severance lawyers will use these same factors and look at past court decisions as guidance for predicting what would be a fair severance package for the terminated individual.
Should I have a lawyer review my severance?
Yes. If you’ve been offered a severance package, it’s in your best interest to have an experienced employment lawyer review it before signing anything. Most employees are not fully aware of their rights under common law or the details are buried in a written employment contract. Severance package reviews can determine whether your employer’s offer reflects your legal entitlement or whether you may be owed more.
In many cases, employees are offered less than what they are legally entitled to. Understanding your legal rights at the time of termination is critical before signing anything.
How do I get the most out of my severance package?
To get the most value out of your severance package, you need to understand what you are entitled to under common law severance norms, not just minimums set by employment standards legislation.
Severance package lawyers at Whitten & Lublin conduct a full review of your termination pay, reasonable notice period, performance bonuses, benefits continuation, and other compensation elements. If the offer falls short, we can help negotiate an increased severance package, or, where necessary, pursue legal action. Timing matters, too: acting quickly after receiving a severance offer helps preserve your options and strengthens your negotiating position.
What is the rule of thumb for severance pay in Canada?
How much severance pay should you receive? A general rule of thumb is one month of severance pay for every year of service, but that’s only a starting point. The actual amount you may be entitled to can be higher or lower, depending on multiple factors, including your age, length of service, role, and the availability of similar employment.
At Whitten & Lublin, our employment lawyers rely on case law and detailed assessments, not just general formulas, to evaluate your severance package and determine what a fair offer looks like. Many non-unionized employees are entitled to significantly more than what their employer initially offers.
What is the rule of thumb for severance pay in Canada?
There isn’t a simple rule of thumb for severance pay in Canada. The amount of severance you may be entitled to depends on both statutory minimums set out by employment standards laws and your potential entitlements under the common law, where severance pay calculations are based on a range of factors, such as your age, length of service, the nature of your job, and how long it could take you to find comparable work, which will vary from case to case. Some employees, such as those with long service or senior roles, can receive up to 24 months of severance (generally viewed as the upper end in Canadian courts).
Many employees receive an initial severance offer that doesn’t reflect their full entitlements. If you’re unsure what you’re owed, it’s worth having your severance reviewed by an experienced employment lawyer.
How can I avoid paying tax on severance pay in Canada?
While you cannot avoid taxes altogether, there are ways to reduce the immediate tax impact of severance pay. One of the most common options is transferring all or part of the severance into a Registered Retirement Savings Plan (RRSP), provided you have available contribution room. This can defer taxes and preserve more of your compensation.
As well, if there is a component of bad faith, discrimination, or statutory violations in your termination, you could have a claim for general damages, which are non-taxable.
Not Sure If Your Severance Package Is Fair? Talk to Experienced Employment Lawyers Today
If you have recently been let go from your employment position and are unsure about your severance package entitlements we encourage you to seek legal advice to better understand your rights. We at Whitten & Lublin are happy to provide employment law insight and advice into your specific circumstances. If you are looking for employment lawyers or severance package lawyers and would like more information about what Whitten & Lublin can do for you, please contact us online or by phone at (416) 640-2667 today.