SEVERANCE PACKAGES

Severance Package Reviews in Calgary

If you have been offered a severance package following a wrongful dismissal or termination without cause, the amount offered by your employer may not reflect your full legal entitlement. A severance package review can help determine whether the termination pay, notice and other compensation being offered are appropriate.

In Alberta, an employee's termination entitlements may extend beyond the minimum amounts required by the Employment Standards Code. Unless an enforceable employment agreement limits those entitlements, an employee may be entitled to reasonable notice at common law.

A severance package can involve much more than base salary. Depending on the employee's compensation structure, termination entitlements may include bonuses, commissions, benefits, pension contributions, allowances, restricted share units (RSUs), performance share units (PSUs), stock options, and other forms of compensation.

There is no fixed formula for determining whether a severance package is fair. Reasonable notice is assessed based on the employee's individual circumstances, including factors such as age, length of service, position, responsibilities and the availability of comparable employment.

Our Calgary employment lawyers review severance packages, employment agreements and compensation arrangements to assess an employee's termination entitlements and identify amounts or benefits that may not have been included in the employer's offer.

Before signing a severance package or release, consider having the offer reviewed by an employment lawyer. Once a release is signed, it may prevent you from pursuing additional termination pay, compensation or other entitlements that were not included in the employer’s offer.

Have you been let go?

Get in touch with our office
and have your severance package reviewed today.

What to Consider Before Accepting a Severance Package

How Do I Know If My Severance Package Is Fair?

A severance offer can appear generous while still falling short of an employee’s legal entitlement. There is no simple “one month per year” formula for calculating severance in Alberta. Age, length of service, seniority, compensation, the nature of the position and the availability of comparable employment can all affect an employee’s entitlement to reasonable notice. In some circumstances, even employees with relatively short service can be entitled to substantial notice periods. A severance package review can determine how the employer’s offer compares to what the employee may actually be entitled to receive.

What Compensation Should Be Included in a Severance Package?

Severance is not necessarily limited to base salary. Employees can lose significant compensation when an employer calculates a termination package using salary alone. Depending on the circumstances, entitlements during the notice period should include bonuses, commissions, benefits, pension contributions, vehicle or other allowances, restricted share units (RSUs), performance share units (PSUs), stock options and other compensation. For executives, managers and highly compensated employees in particular, these additional components can represent a substantial portion of the value of a severance claim.

Should I Have My Severance Package Reviewed Before Signing?

A severance package is typically presented in exchange for a release of the employee’s legal claims. Once that release is signed, there may be little opportunity to seek additional compensation. A severance package review can identify whether the employer has relied on an enforceable termination clause, used an appropriate notice period, accounted for all components of compensation, and addressed other amounts that may become payable as a result of the termination. Initial severance offers frequently fall short of an employee’s actual legal entitlement. The difference between the package offered and the compensation that can reasonably be pursued may be substantial.

Can I Negotiate a Severance Package in Alberta?

Yes. An employer’s initial severance offer may be substantially less than the employee’s legal entitlement. Most employers make conservative initial offers in the hope that an employee will accept the package and sign a release without obtaining legal advice or seeking additional compensation. Where there is a basis to seek more, severance negotiations can address not only the length of the notice period, but also bonuses, commissions, benefits, equity compensation and the structure of the payment itself. Most severance disputes can be negotiated without commencing a lawsuit.