Losing your job can be overwhelming. Many employees are handed a severance package and asked to sign a release within days, often before they have had an opportunity to understand their legal rights. While every case is different, accepting an offer too quickly may result in giving up the opportunity to pursue additional compensation or negotiate more favourable terms.
Below are seven common mistakes employees make after a termination and practical guidance on how to avoid them:
1. Assuming the First Offer Is the Best Offer
Employers often present an initial package designed to resolve the matter quickly. Depending on the employment contract, applicable legislation and the surrounding circumstances, an employee may have rights that extend beyond the initial proposal. A careful legal review can help determine whether the offer appears reasonable.
2. Signing the Release Without Understanding It
Most severance packages include a Full and Final Release. Once signed, it commonly prevents the employee from bringing further claims arising from the employment relationship. Before signing, ensure you understand exactly what rights you are giving up.
3. Focusing Only on the Dollar Amount
A severance package may include benefits continuation, bonuses, commissions, equity awards, vacation pay, references and restrictive obligations. Looking only at the lump-sum payment can overlook terms that have significant financial value.
4. Ignoring the Employment Contract
Termination clauses, bonus provisions and incentive plans frequently influence an employee’s legal position. Not every contractual provision is enforceable, making it important to review the agreement carefully.
5. Feeling Pressured by Tight Deadlines
Short deadlines are common. While they should be taken seriously, employees often have an opportunity to request additional time to obtain legal advice. A thoughtful review is generally preferable to a rushed decision.
6. Relying on Friends or Online Calculators
No two employment cases are identical. Length of service, age, position, and compensation structure are only some of the factors that may affect an employee’s rights. General internet estimates should never replace tailored legal advice.
7. Waiting Too Long to Seek Advice
If you believe your package may be inadequate, speak with an employment lawyer promptly. Delay can complicate negotiations and may affect available options.
Frequently Asked Questions
Can I negotiate my severance package?
Yes, often you can seek an enhanced negotiated severance, particularly if you are not subject to an enforceable employment agreement, which limits your severance to your minimums under Employment Standards.
Do I have to sign immediately?
Not necessarily. Many employees request additional time to obtain legal advice.
What if my contract contains a termination clause?
The wording and enforceability of the termination clause should be reviewed before conclusions are drawn.
How Pelsmakher Law Can Help
Pelsmakher Law advises employees and employers throughout Ontario on severance packages, wrongful dismissal, constructive dismissal and employment contracts. We help clients understand their rights, assess severance offers and negotiate fair resolutions where appropriate.
