Reviewing your First Severance Package

If you are new to employment law, or practice general civil litigation, you will see your fair share of severance packages. In this article, I provide an overview of items not to miss when you review your client’s package and provide suggestions for your demand letter.

The below information is contingent on what the client’s entitlements are based on their statutory minimums, common law entitlement and whether there is an employment contract.

1. Notice Period

Obviously the length of the notice period is extremely important. I won’t go into that analysis as it depends heavily on the factors of each client (known as the Bardal Factors), and whether there is an enforceable contract.

Things I often see about the proposed offer of notice and severance is that employers will clearly notify the employee of their statutory notice period (1 week/year up to 8 weeks) and this will be provided regardless of signing a release. But often the statutory severance (1 week/year up to 26 weeks) gets lumped into any “additional payment” being offered for the return of a signed release.

Ensure the client knows that they will receive both the statutory notice and the statutory severance, regardless if they sign a release. You can then point the error out to the employer in your demand letter and state “I trust this will be fixed immediately”.

2. Deadline for Signing

Employees are always concerned by the deadline for signing. Obviously if the employee is not accepting the deal, the deadline is irrelevant. But employees are still fixated on this date. Offer to send the employer a brief letter stating you have been retained and will provide a substantive response to the termination letter shortly.