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No-Fear Severance Negotiations: Get the Severance Package You Deserve
Losing a job or choosing to leave can be stressful.
The adventuresome and imperturbable Don Quixote, a character created by Miguel de Cervantes about 400 years ago, told his faithful companion, “I think, Sancho, there is no proverb that is not true, all being maxims drawn from experience itself … especially that one that says, Where one door shuts, another opens… it now opens wide another one for another better and more certain adventure …. ”
As you contemplate your next adventure, you should not be too quick to leave the old one behind. Stay in touch with friendly co-workers. Create a new reference list and draft a new resume. Take the time to review the legality of your dismissal and the details of your severance package. Explore options to leave this employer with the optimal benefits and minimal restrictions and get the severance package you deserve.
Job Loss Isn’t About You
The end of the calendar year is also the end of the fiscal year for many organizations. It’s a time to assess financial and human resource needs for the new fiscal year. In many cases, this process results in job dismissals.
- Decrease overhead expenses
- Jobs outsourced or made more efficient with technical innovation
- Relocation of headquarters or branch
- Merger or buyout (may involve any or all of the above reasons)
So if you receive the proverbial “pink slip,” feel free to cry, scream, or laugh hysterically. But NEVER allow yourself to feel devalued as the job loss likely is not about you. (Of course, if you’ve persistently underperformed or misbehaved, despite warnings, that’s another story.)
Termination Math: How Much, How Long?
Your termination entitlements (i.e. severance package) is determined based on a number of factors, which we have discussed in previous blog posts. But your severance package can never be less than what is provided under Ontario’s Employment Standards Act (ESA), which details the employer’s minimum requirements for a severance package where there is a layoff or dismissal.
But be aware: the ESA only sets the floor and not the ceiling (or your actual) job loss entitlements and the method for calculating what you’re actually entitled to receive may be more complicated.
Inside the Severance Package: T’s and C’s
If you’re a mid-to-late career professional, senior manager, or executive, there’s so much more you need to consider beyond termination pay calculations — these are other considerations to determine the true value of your overall severance package. Some things to look for — benefits and overly restrictive or unfair terms that may — or may not — be in the severance package:
- Has your former employer provided job search resources?
- Does the severance package include specific benefits critically important for you and your dependents?
- Are payments structured to minimize your tax burden?
- Are there restrictions to where you might work, industry, or type of work?
- Is there a chance of lost benefits if you start your own business or start or continue a side-hustle?
- Are there circumstances that trigger the loss of the entire severance package?
- Do you have to actively job search and report these job search activities?
- Are you required to accept any job offer or are you allowed to be more selective?
- Do you have to adhere to other post-employment restrictions (for risk of losing or paying back the severance package)?
Who Needs a Lawyer: Maybe You
Your friends and co-workers who have *successfully* been through a similar experience will advise you to review your severance package with a lawyer. Ignore this advice at your own risk!
The biggest question for a person recently dismissed or laid off from a job is:
- Was the termination “wrongful” as defined by law?; and
- Should I accept the severance package offered?
These question can best be answered by reviewing the circumstances of your dismissal and your severance package with an employment lawyer. An employment lawyer can help you understand your legal position, understand the true value of the severance package, and identify negotiable terms to improve value. You should feel confident that the lawyer you hire is honest, has your best interest at heart, will be pleasant to work with, and is genuinely interested in your case.
In fact, you should always consult a lawyer specializing in employment law before signing anything related to severance.
If your former employer refuses to negotiate (the worst-case scenario), the original severance package will still be there for you. But in most cases, you will reach an advantageous agreement with your former employer by initiating the negotiation process.
Getting the best possible severance will help set you up for your next professional opportunity — or, as Don Quixote said, “another better and more certain adventure.”
Hire an Advocation Employment Lawyer
Advocation Professional Corporation is an employment law firm serving the greater Toronto area. At Advocation, we thoroughly assess a client’s situation to determine whether the severance package is best for them. If not, we offer ways the severance package can be improved to meet the dismissed employee’s personal, professional, and financial needs and goals. And we can act as your advocate, acting on your behalf to negotiate improvements to your severance package with your former employer to ensure that you get the severance package that you deserve (and need).
To schedule your consultation, contact Advocation today.