Being laid off from a job is a difficult situation that can introduce substantial uncertainty into your life. While it is a challenge, an employment lawyer in Edmonton can help you understand how the law aims to provide a cushion for individuals during this transition. The law states you should receive either time to make that transition and/or a severance package to lessen the financial blow.
However, is the package you’ve been offered fair? At Lypkie Henderson, our employment lawyers in Edmonton can help you make that determination. First, let’s explore some key facts to consider as you evaluate your situation.
What Is Severance?
Severance refers to the benefits your employer provides at the end of your employment, sometimes called “pay in lieu of notice.” When an employer ends the relationship, they must, at a minimum, give a defined period of notice based on how long you’ve worked for the business. Alternatively, they may offer termination pay to conclude the relationship more quickly, or use a combination of notice and financial compensation.
What constitutes “reasonable notice” or fair “severance pay” is not always easy to understand. These are common-law determinations, meaning the Employment Standards Code doesn’t govern them. Your employment contract may specify notice and severance that your employer is obligated to provide on a without-cause termination and may include more than the minimum required by the employment code. Because of these factors, legal assistance in analyzing your offer can be a valuable resource.
What Factors Influence the Creation of a Fair Severance Package?
Because the Code allows for notice, pay in lieu, or a combination of both, employers have some latitude in choosing how to end a working relationship. Consider that if an employee is due two weeks of notice, then an employer may provide one week of notice and one week of termination pay. The employer could also simply provide two weeks of termination pay based on what the employee would have earned had they continued working throughout the notice period. However, what makes such a package “fair”? There are complicating factors that could mean you’re owed more.
Other elements of your compensation package, including bonuses, commissions, options, and performance-based incentives, may factor into determining the amount of termination pay you should receive. Other factors that can affect severance pay include the length of your service, your age, your job position, the nature of your role, and even the availability of comparable jobs in the marketplace. All of these play an important role in developing a severance package.
Though some employers argue to exclude bonuses and other compensation, the reality is more complex. If you are working through your notice period and continue to earn bonuses or commissions during that time, or if you earned them before giving notice but have not yet been paid, these amounts should be included in a severance package unless your employment agreement clearly says otherwise. Whether a clause in an employment agreement clearly limits an entitlement to a bonus or commissions during the notice period is a complex legal question. An employment lawyer can assist you with this determination.
Why a Prompt Legal Review Matters
Employers must comply with the law while also protecting their own interests. To reduce termination costs, they may offer severance packages that exclude certain forms of compensation an employee would otherwise receive. These offers don’t always reflect the full value of what’s owed. Because common law and court precedents largely shape severance entitlements, it can be difficult for an employee to assess the fairness of a package at first glance.
Rather than signing an agreement to accept the package right away, consider the value of consulting a lawyer. A legal review can ensure that you’ve received a fair offer, or, if you haven’t, open the door to options for pursuing the full compensation you should receive instead. Delaying your acceptance gives you time to negotiate a fair outcome with a lawyer. However, if you wait too long or sign immediately, you’ll forfeit your right to seek that additional compensation. Speaking with employment and labour lawyers in Edmonton when you first learn of your termination could make a difference.
Finding Help With Your Termination Today
At Lypkie Henderson, we make it simple to connect with an employment lawyer in Edmonton to review your case. With deep experience in this area of employment law, we can help you review your severance package and factor in different considerations, such as length of service, duties, other compensation and more, to arrive at a clear conclusion about your next steps. If you’ve recently received a termination notice, consider reaching out to our team as soon as possible to understand your rights and what kind of package you should receive. Chat with us today to get started.
