Severance Package Review
What is a severance package?
A severance package is the bundle of payments, benefits, and terms offered when employment ends. It may include termination pay, statutory severance pay, salary continuance, benefits continuation, bonus or commission treatment, vacation pay, stock options, RSUs, reference language, confidentiality terms, and a release.
The Employment Standards Act, 2000, known as the ESA, sets minimum termination entitlements in Ontario. But many non-unionized employees may be owed more under common-law reasonable notice, depending on their age, role, length of service, compensation, job market conditions, and employment contract.
If you were terminated without receiving proper notice or pay in lieu, your severance issue may also involve a wrongful dismissal claim.
Why get a severance package review before you sign?
Most severance packages include a release that waives legal rights. Once you sign, you may lose the ability to pursue more compensation, challenge the termination, or bring related employment claims.
Deadlines are often short, but that does not mean you should sign without advice. A severance package review helps you understand what the offer is worth, what rights you may be giving up, and whether there is room to negotiate.
Value is about more than base salary. Vanguard Law reviews termination letters, employment contracts, release terms, benefits, bonuses, commissions, equity, restrictive covenants, and practical terms like reference letters and confidentiality clauses.
If your termination followed a toxic workplace, harassment, discrimination, reprisal, medical leave, or a major change to your job, your severance review may need to consider related claims, including constructive dismissal, toxic work environment, or long-term disability denial issues.
What we review
Notice and severance calculations: We assess ESA minimums, statutory severance pay, pay in lieu of notice, and potential common-law reasonable notice.
Employment contracts and termination clauses: We review whether the employer is relying on a termination clause, whether the language may limit your entitlements, and whether the clause may be enforceable.
Benefits continuation: We review health, dental, life insurance, short-term disability, long-term disability, pension, RRSP matching, and other benefits during the notice period.
Bonus, commission, and incentive compensation: We assess whether you may be entitled to bonuses, commissions, performance pay, or incentive compensation during the notice period.
Equity and stock compensation: We review stock options, RSUs, ESPPs, vesting terms, plan language, and deadlines that may affect your compensation.
Release wording: We explain what rights you may be giving up, including employment claims, human rights claims, benefit claims, and other legal rights connected to your employment.
Confidentiality and non-disparagement terms: We review what you can and cannot say after signing, and whether the terms are too broad or one-sided.
Restrictive covenants: We assess non-solicitation, non-competition, confidentiality, and post-employment obligations that may affect your next role.
Payment structure: We compare lump sum payments, salary continuance, installments, mitigation clauses, “stop payment” clauses, and conditions attached to payment.
Practical exit terms: We review reference letters, announcements, return of property, ROE details, benefits transition, tax timing, and other terms that may affect your next steps.
Lump sum vs. salary continuance
A lump sum pays the severance amount at once. Salary continuance spreads payments over time, often as if you remained on payroll during the notice period.
Each structure has advantages and risks. A lump sum can provide certainty and immediate access to funds. Salary continuance may preserve benefits for longer, but some offers include mitigation or “stop payment” clauses that reduce or end payments if you find new work.
The best structure depends on your goals, cash-flow needs, tax timing, benefits coverage, job prospects, and the strength of your legal position. If the offer seems low or the payment terms are conditional, a severance review can help determine whether negotiation makes sense.
Timing, deadlines, and limitation periods
Signing windows can be short. It is common to ask for more time to review the offer, especially where the package includes a release, complicated payment terms, benefits issues, or restrictive covenants.
Civil wrongful dismissal claims are subject to strict limitation periods. In many cases, a claim must be started within two years of discovery, often the termination date. Employees should act promptly to preserve documents, understand their rights, and avoid missing important deadlines.
You may also need to choose between pursuing an ESA complaint and starting a court claim about the same termination. That choice can affect your rights, strategy, and potential recovery. Get legal advice before electing a path.
If your severance offer may be connected to a broader dismissal dispute, review our page on wrongful dismissal.
Our Ontario-focused process
Document intake and quick review: We review your termination letter, severance offer, employment contract, compensation documents, benefits information, bonus or commission plans, and any release or deadline.
Entitlements analysis: We assess ESA minimums, statutory severance pay, common-law reasonable notice, benefits continuation, bonus and commission rights, equity terms, and potential issues with the employment contract.
Strategy and negotiation: We identify leverage points, explain your options, prepare counterproposals where appropriate, and negotiate with the employer or employer’s counsel.
Finalizing terms: We review the final agreement, explain what you are signing, confirm negotiated changes, and help you understand next steps before you accept.
Clear communication: We explain the risks, timelines, costs, and realistic outcomes in plain English so you can make an informed decision.
Who we help across Ontario
Vanguard Law assists non-unionized employees across Ontario, including Toronto, Ottawa, Mississauga, Brampton, Hamilton, London, Kitchener-Waterloo, Markham, Vaughan, Oakville, St. Catharines, Niagara, and Windsor. Virtual consultations are available province-wide.
If you are an employer preparing a termination package, visit our Workplace Counsel+™ page for proactive employer-side employment law support.
Related employment law services
Severance package issues often overlap with other employment law claims. You may also need help with:
Wrongful Dismissal — if you were terminated without proper notice, pay in lieu, or fair compensation.
Constructive Dismissal — if your employer changed your pay, duties, title, location, hours, or working conditions before you left.
Toxic Work Environment — if bullying, harassment, intimidation, discrimination, or reprisals contributed to your departure.
FAQs
Should I sign my severance package by the deadline?
Not before you understand what you are signing. Employers often include short response deadlines, but it is common to ask for more time to review the offer. A severance package review can help you understand your rights, your risks, and whether the offer should be negotiated.
Can I negotiate a better severance package?
Often, yes. The strength of a negotiation depends on your employment contract, length of service, age, role, compensation structure, job market, reason for termination, and whether the employer’s offer properly accounts for common-law notice, benefits, bonuses, commissions, and other entitlements.
What if my employer says the offer is final?
“Final” does not always mean final. Employers may still negotiate where there are legal risks, contract issues, human rights concerns, unpaid compensation, benefits problems, or a reasonable basis to claim more notice.
Do I get severance if I resigned or was constructively dismissed?
Possibly. If your employer made major unilateral changes to your pay, duties, hours, location, reporting structure, or working conditions, the law may treat the resignation as a constructive dismissal. You should get advice quickly before taking steps that could affect your claim.
Will severance affect EI?
Severance payments can affect EI timing. The structure of the payment, the ROE, salary continuance, lump sum treatment, and allocation of amounts may all matter. Get advice before agreeing to payment terms you do not understand.
What documents should I bring to a severance review?
Bring your termination letter, severance offer, employment contract, recent pay stubs, bonus or commission plans, benefits information, equity documents, relevant emails, performance documents, and any release the employer wants you to sign.
How long does a severance review take?
Many severance reviews can be completed quickly once the key documents are available. More complex matters may take longer, especially where there are bonus disputes, equity issues, disability leave, human rights concerns, constructive dismissal issues, or negotiations with employer counsel.
Speak with an Ontario employment lawyer
Book a confidential consultation with Vanguard Law before signing your severance package. We help you understand your rights, assess the value of the offer, identify negotiation points, and decide whether to accept, counter, or pursue a claim.