Should I sign my severance package in Ontario?
Probably not today. If your employer just handed you a severance package and wants it signed by Friday, the most useful thing you can do is slow the clock down. A signed severance agreement usually ends any further claim you could make, and you only get to make that decision once.
Why is there a deadline?
Say you've worked somewhere for nine years. A manager and someone from HR call you into a room. Within a few minutes you've been told your position is gone, and you're handed an envelope with an offer and a date on it. Most people walk out of that room in shock. Some feel a bit of relief at having something in writing. Almost everyone feels pressure to make the problem go away.
That pressure is what the deadline is for. It isn't a legal rule. It limits the time you have to ask questions, and a short deadline does that very well. Asking for more time is reasonable, and many employers agree. If yours won't give you a few extra days to read a legal document, that tells you something.
The law doesn't set a deadline for accepting an offer. The time limit to start a wrongful dismissal claim in Ontario is generally two years from your termination date, so the rush rarely comes from the law.
What are you actually signing?
Almost every severance offer comes with a release. In plain terms, you agree to take the money and not make any further claim about your job or how it ended. Depending on the wording, that can include wrongful dismissal and human rights claims.
Releases are written broadly on purpose. The company is paying to be finished with the matter, which is understandable. The question is whether the price is fair for what you're giving up.
Is the number fair?
You can't answer that from the letter alone. Ontario's Employment Standards Act sets minimums, and for some employees the minimum is all the offer contains. Many employees are owed more under the common law, which looks at your age, how long you worked there, the kind of job you did, and how hard it would be to find something similar. Two people on the same salary can be owed very different amounts.
So an offer isn't wrong because it's small or right because it's large. It's right or wrong measured against your situation.
Read what surrounds the number too. How it's paid changes your taxes. Benefits may stop sooner than you expect. A non-compete or confidentiality clause can follow you into your next job. And your Record of Employment and a reference letter are things to ask for directly.
What do you get if you don't sign?
This surprises people. In general, your employer has to pay what the Employment Standards Act requires whether or not you sign a release. The release is usually attached to the extra money offered on top of that. So it helps to ask one plain question: which part of this is the legal minimum, and which part am I being paid to sign away?
Can you negotiate?
Often, yes. A first offer is frequently a starting point. You can reply in writing, say what you need, and ask for more. I won't tell you that you'll get it. Nobody can say that before they've looked at your situation. What a proper review can tell you is whether the offer looks low, and what options you have.
When should you talk to a lawyer?
Before you sign, and ideally before you reply. Some employers require independent legal advice before they'll accept a signed release. Even when they don't, the idea is worth borrowing: someone with no stake in the outcome reads the document and explains it in language you can follow.
If you've already signed, tell us what happened. What can be done depends on the wording and the circumstances, and I'd rather give you a straight answer than a hopeful one.
If you're holding an offer right now, tell us what happened. We'll listen, explain your options, and tell you where you stand.
This post is general information for Ontario employees. It isn't legal advice about your situation.
