Introduction

When facing a job loss, employers often present a severance package with a request to sign it quickly. While the offer may seem straightforward, accepting it without legal advice can cost you thousands—or even tens of thousands—of dollars. In Ontario, severance packages are negotiable, and employers frequently rely on employees’ lack of awareness to minimize payouts. This blog explains why consulting an employment lawyer is critical to protecting your rights and maximizing your entitlements.

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1. Severance Packages Are Rarely “Take It or Leave It”

Many employees assume severance offers are non-negotiable, but this is a common misconception. Employers often start with the bare minimum required under the Employment Standards Act (ESA), even though most employees are entitled to far more under common law. A lawyer can help you:

● Identify undervalued entitlements.

● Negotiate better terms (e.g., extended benefits, larger payouts).

● Avoid signing away your right to sue for wrongful dismissal.

Key Stat: Common law severance is typically 3–4x higher than ESA minimums.

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2. Hidden Risks in Severance Agreements

Severance packages often include clauses that jeopardize your future rights. A lawyer can spot and address red flags such as:

● Release of Claims: Waiving your right to pursue legal action for wrongful dismissal, discrimination, or unpaid wages.

● Restrictive Covenants: Overly broad non-compete or non-solicitation clauses that limit future employment.

● Inadequate Compensation: Offers that ignore common law factors like age, tenure, or job market conditions.

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3. How a Lawyer Adds Value

a) Calculating Your True Entitlements

● ESA Minimums: 1 week of severance pay per year of service (capped at 26 weeks) for eligible employees.

● Common Law: Courts award "reasonable notice" based on factors like:

○ Length of service,

○ Age,

○ Industry,

○ Availability of comparable work.

A lawyer can assess your case and determine if your offer aligns with recent court rulings.

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b) Negotiating from a Position of Strength

Employers are more likely to improve their offer when faced with a lawyer’s demand letter outlining:

● Legal risks they face (e.g., invalid termination clauses).

● Potential court-awarded damages.

● Tax-efficient structuring of payments (e.g., lump sums vs. salary continuance).

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c) Protecting Non-Monetary Rights

A lawyer can negotiate for:

● Extended health benefits.

● Positive references.

● Career coaching or outplacement services.

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4. Common Pitfalls of DIY Severance Review

● Accepting ESA Minimums: Most employees are owed more under common law.

● Overlooking Future Claims: Signing a release may prevent you from suing for issues like harassment or unpaid overtime.

● Missing Deadlines: Ontario’s limitation period for filing a claim is 2 years—delay can forfeit your rights.

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5. What Does a Lawyer Review?

A thorough severance package review includes:

1. Employment Contract Scrutiny: Ensuring termination clauses comply with the ESA.

2. Entitlement Analysis: Comparing the offer to common law precedents.

3. Clause-by-Clause Breakdown: Flagging unenforceable terms (e.g., overly restrictive non-competes).

4. Strategy Development: Advising on negotiation tactics or litigation risks.

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6. FAQs About Severance Package Reviews

Q: How much does a lawyer cost?

A: Many employment lawyers offer free consultations or work on a contingency fee basis (you pay only if they secure additional compensation). The cost of not hiring a lawyer often far exceeds legal fees.

Q: Can I negotiate severance myself?

A: Yes, but employers know employees lack leverage without legal representation. A lawyer’s involvement signals you’re serious about your rights.

Q: What if I already signed the agreement?

A: In some cases, you may still challenge it (e.g., if signed under duress or based on misinformation). Consult a lawyer immediately.

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7. Practical Steps if You Receive a Severance Offer

1. Don’t Panic or Sign Immediately: Take time to review.

2. Document Everything: Save all communications and the original offer.

3. Consult a Lawyer Promptly: Even a 1-hour review can reveal critical issues.

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Conclusion

In Ontario, signing a severance package without legal advice is like settling an insurance claim without knowing the policy’s value—you risk leaving money and rights on the table. An employment lawyer ensures your severance reflects your true worth under the law and safeguards your future opportunities.

Remember: Your employer has legal counsel. Shouldn’t you?

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Free Consultation with London Employment Lawyers

Ontario’s laws provide critical protections for employees during mass layoffs, ensuring they receive fair notice, severance pay, and support. If you’re affected by a group termination, understanding your rights and seeking professional advice can help you navigate this challenging time and secure the compensation you deserve. Please do not hesitate to contact our experienced London employment lawyers for a free legal consultation. Randy Ai Law Office can be contacted at (548) 489-2006 or fill out the contact form.

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