Severance pay has many different labels including termination pay, severance package, pay in lieu of notice, exit package, layoff package or a package. Ultimately, they all refer to the same concept of severance pay.

A severance package is the pay your employer provides you in place of the proper advanced warning known as notice, if you have been dismissed without cause.

Unless you are dismissed for just cause, you are entitled to a severance package.
Your employer will typically provide you with a written termination letter setting out a proposal that they are prepared to pay, in exchange for a signed release.

Your employer may take the position that there is an enforceable severance provision in your employment contract that limits your entitlement to severance. The good news is that these provisions are often not enforceable.

If your employer alleges that there is just cause to terminate your employment without severance, the high standard of proof required to back this position up is rarely met. In many cases, you may still be entitled to severance despite your employer’s claim that there was just cause for dismissing you.

You do not have the right to continued employment in Canada. In other words, you can be fired from your job at any time and for almost any reason, as long as your employer provides you with the proper advanced warning or payment, known as severance.

However, there are several rules regarding how to properly terminate and compensate you once you have been dismissed without cause.

• Wrongful dismissal laws protect you from inadequate notice or severance.
• Constructive dismissal laws protect you from fundamental changes to your job position or compensation.
• Human Rights laws protect you from discrimination during employment and at time of dismissal.
• Statutory laws (like the Employment Standards Act) protect you from terminations that do not respect the legislated minimums.