Negotiating Severance Packages

A severance package is an offer of compromise from your employer. 

The employer is making the offer because they understand that they have exposure to a legal claim from you. 

The key question when being presented with a severance package is whether the employer’s offer is reasonable or not. To analyze this, you must first understand your “best case” and how the current offer compares to it.

There are several other variables to consider when reviewing a severance package, such as your future job prospects (often referred to as mitigation by lawyers) and which may impact the reasonableness of the severance package being presented to you. 

Is my Severance Package Negotiable?

Yes, in our experience most severance packages are open to negotiation. Rarely does your employer lead with their best offer. 

Other Factors to Consider in Reviewing a Severance Package

A proper Review of a Severance Package will include:

  • Understanding how the employer’s severance offer compares to your “best case”.
  • Understanding the different options to negotiate an enhanced severance package with your employer, including engaging the assistance of a lawyer to negotiate on your behalf.
  • Understanding the legal documentation which you are being asked to sign. Employers almost always require that a release be signed as a condition of receiving a severance package. 
  • Strategies to minimize taxation on the severance being paid to you. There are multiple different strategies which may be applied depending on the details of your case. 
  • Understanding your post-termination obligations to your employer, such as confidentiality and fiduciary obligations.

Your Next Steps

Please contact our Intake Specialist at or 780-669-4542 should you require assistance with an Employment Law matter.

Case Study

Our client was presented with a severance package from their employer. The employer was a large multi-national company with its head office located in Ontario. It had laid off a significant number of its employees due to corporate restructuring. The initial severance offer was over six figures and appeared reasonable to our client. In return for the severance payment, the employer requested that our client sign an extensive Release. Our lawyers reviewed the severance package and concluded that there was a strong likelihood that the severance package could be increased. We concluded that it was reasonable to conduct further negotiations with the employer. Our client hired us for this purpose. We were able to increase the value of the severance package. We also negotiated changes to the Release that the employer was requesting and was successful in having the employer pay the employee their severance in a tax efficient manner.