What to do if your employment is terminated

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Learning that your employment has been terminated is, almost without exception, a devastating moment. It’s also sometimes incredibly confusing. “I’ve received a severance package,” a client tells me, “but I don’t know what it means.” Another writes: “My employment was terminated today, and I have to sign documents by Monday. What do I do? Can you help?!” The COVID-19 pandemic has made significant immediate and long-term impacts on employment in Canada. You might have lost your job and you mostly likely know someone who did. Are there more ahead? Most importantly, what do you need to know so that you can navigate the end of your employment, should it come to that? I’ve answered the most common questions I hear in my legal practice in this guide.

“I was given a deadline to sign papers. What does it really mean?”

Most employers will ask an employee to sign various documents relating to the termination of their employment by a certain deadline. These documents usually include a release and an agreement as to what the employee will be paid. This deadline is most often one week after the termination date. What does the deadline mean? It usually means that if you do not sign the documents by the deadline, your employer will pay only the minimum amount it is required to pay you pursuant to the terms of an employment agreement or the applicable statute (the employer’s legal requirement). If they have offered to pay you more than the minimum, that offer will expire at that deadline. Of course, many employees react with shock upon learning they have lost their job. Some employees are simply too surprised or emotional to get down to the business of reviewing what can be a painful pile of papers. Employers sometimes conduct termination meetings at the end of day on a Friday, often in the hopes of giving the employee some privacy, but which also leaves the employee to search for a lawyer on the weekend. Sometimes, as well, a statutory holiday might intervene, making finding legal assistance a little more arduous. Here’s what you should know: This deadline is usually negotiable. If you ask, and if your request is reasonable, most employers will grant you additional time to review the offer—with a lawyer, if you wish—and determine whether you want to accept it. When I am retained by an employee, either the employee or I will reach out to the employer to advise that I am in the process of meeting with the employee, and ask for additional time. I have never had an employer turn down such a request.

“Can I negotiate with a big company?”

I call this the “David v. Goliath Question.” Some employees are reluctant to challenge their employer’s offer—to ask for more. I once had a client who was adamant in her conviction that her employer was a huge corporation and wouldn’t bother to negotiate with her. I let her know that, first, employees have bargaining power. Second, negotiation is different from capitulation; employers, whether big or small, will usually engage in negotiations with employees with respect to severance packages. Most employers anticipate that employees will consult with a lawyer or other advisors about their package, and that they may ask for revised terms. A lawyer will help you to understand your rights, but generally terms that may need to be negotiated include the length of notice (called the “notice period”) and the types of benefits that are extended through that notice period. Whether or not an employer revises its offer, employers by and large expect that terminating an employee’s employment may involve some sort of negotiation process.

Top 3 things to know if your employment is terminated

I have three takeaways that you should always remember if you are given a severance package:

Be reasonable. This is my biggest advice to employees and employers alike. While you may certainly feel like burning a bridge or making a point, this is not likely in your best interest. Don’t get me wrong: you should assert your rights and, if necessary, pursue litigation to enforce them. What I caution against, however, is asking for the proverbial pony, as you may appear to be someone not worth negotiating with, and that makes the entire process much more difficult. (But, if having a pony is part of your regular remuneration, ask away!)
Talk to a financial advisor. Your lawyer will help you to understand your legal rights, but a financial person—your accountant or investment advisor, in particular—can help you to assess the structure of the payments set out in your employer’s proposal. This can be important, as it may help you to avoid potential pitfalls and to access certain tax treatments that may net you a greater amount.
Ask for compensation toward your legal fees. Many employers consult their legal counsel when making decisions about terminations and when structuring severance packages. Many also acknowledge that employees will seek out legal advice when considering the package presented to them. If you consult with a lawyer, you can ask your employer to contribute to those legal fees or to direct a portion of the severance package to your lawyer.

And, hey, never, ever forget to see a lawyer before you sign! Andrea Sanche is a litigator and partner with Ricketts Harris LLP in Toronto. Please note that this article does not constitute legal advice.

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Basil Robert Cuddihy says:

January 26, 2021 at 2:01 pm

One thing the dismissed employee may consider, which I have done, is to take the original offer and re-write it for the employer and send it back to them for approval. Worked for me.

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Greg Johnston says:

October 3, 2021 at 5:51 pm

It really depends on the company and their philosophy on severance. In my experience as someone who has unfortunately written many termination letters, I always offered a reasonable severance package that was non-negotiable from a dollars standpoint. Negotiating other sections of the termination, i.e. references, benefits, time to respond, lump sum or salary continuance could all be negotiated. Many people, including some lawyers feel the threat of a law suit is enough to have the employer cave in, but that is only if the offer is unreasonable and in that case, shame on the employer and they should have to deal with the legal ramifications.

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