Severance Packages
Zayouna Law Firm reviews severance offers for employees across Ontario. If your package was calculated on statutory minimums, the number on the letter is likely not the number you are owed.
Most severance offers are the employer's opening number.
Most severance offers arrive with a signature line and a deadline. The figure in the letter is usually built on the Employment Standards Act minimums, which is the floor an employer must pay rather than the ceiling a court would award. An employee dismissed without cause is often entitled to common law reasonable notice instead, and that entitlement can be several times the statutory amount depending on age, length of service and the role held.
Signing early is what usually costs employees money. Once a release is signed the claim is normally finished, even if the amount later proves to be well below what a court would have ordered. Having the offer reviewed before the deadline keeps every option open, including negotiation, a claim through the Ministry of Labour, or a civil claim for reasonable notice.
YOU DESERVE TO BE TREATED FAIRLY
How severance is calculated in Ontario
Ontario runs three separate calculations and they are routinely confused with each other. Statutory notice under the Employment Standards Act starts after three months of employment and runs one week per year of service to a maximum of eight weeks. Statutory severance pay is a different amount again, one week per year to a maximum of 26 weeks, and it reaches only employees with five or more years of service whose employer has a global payroll of at least $2.5 million, as set out in Ontario’s guide to severance pay.
Common law reasonable notice is the third calculation and usually the largest. It is assessed case by case on your age, your length of service, the nature of the position you held, and how long a comparable role is likely to take to find.
WHAT A SEVERANCE PACKAGE SHOULD COVER
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Where severance offers fall short
An offer is rarely wrong in an obvious way. It is more often built on one narrow reading of your entitlement, with the parts that are harder to calculate quietly left out. Reading the offer next to three documents is what shows the gap: your employment agreement with any later amendments, your pay records covering base salary and bonus or commission history, and the termination letter with its deadline. Most of the gaps fall into the same handful of categories.
- An offer built on Employment Standards Act minimums, or on less service than you actually have
- Benefits ended on the termination date instead of continuing through the notice period
- A bonus or commission already earned before the termination date treated as forfeited on the way out
- A signing deadline too short to get advice
- A release that also signs away human rights and unpaid wage claims
Should you sign the release?
A release is the employer’s protection, not yours. It normally ends the matter for good, which is why the deadline attached to it matters more than the dollar figure beside it. Deadlines can usually be extended by asking, and an employer that refuses a short extension for legal advice has told you something useful about the offer.
How long do you have to act?
Two clocks run at once. A civil claim for reasonable notice generally has to be started within two years of the termination date under the Limitations Act. A complaint to the Ministry of Labour under the Employment Standards Act has its own two year window, and filing one can close off a court claim for the same entitlement, so the choice between the two routes gets made in the first weeks. If the only amount in dispute is unpaid vacation pay or a few weeks of statutory notice, that free complaint route may serve you better than retaining a lawyer.
Do you have to look for work?
Ontario law expects a dismissed employee to look for comparable work, and income earned during the notice period is normally deducted from what the former employer owes. That does not mean taking the first role offered at any salary, and it does not reduce statutory entitlements. Keeping a dated record of applications and interviews protects the claim either way.
Our Severance Package Experience
Employment files are led by Samiya Ahmad, who reviews offers, negotiates improvements, and litigates when a fair number cannot be reached. Book a free consultation.
Results
Most severance files settle by negotiation, because a well documented demand backed by a credible claim usually costs an employer less to resolve than to defend.
Relationships
You deal with the lawyer handling your file, not a call centre. Zayouna Law Firm serves clients in several languages, with interpreters available where the firm does not speak yours.
Recovery
The point of a severance claim is a stable landing. That means the notice period, the benefits and the earned compensation, negotiated in a timeframe that still matches your job search.
Service Areas
Severance Packages Etobicoke
Severance advice for Etobicoke employees, from the firm’s Four Seasons Place office in Etobicoke.
Severance Packages Toronto
Severance offers from Toronto employers reviewed and negotiated, including bonus and commission disputes.
Severance Packages Burlington
Severance reviews for Burlington and Halton employees, handled from the firm’s Ironstone Drive office.
Severance Packages Brampton
Severance claims for Brampton employees, including long service manufacturing and logistics roles.
Severance Packages Mississauga
Severance reviews for Mississauga employees, from corporate head office roles to warehouse dismissals.
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Common Questions About Severance Packages
How much severance am I entitled to in Ontario?
There is no single formula. Statutory notice runs one week per year of service to eight weeks, and statutory severance pay adds one week per year to 26 weeks for employees with five or more years of service whose employer has a global payroll of $2.5 million or more. Common law reasonable notice is separate and usually higher, assessed on age, service, position and how long a comparable job should take to find.
Is severance pay mandatory in Ontario?
Statutory severance pay is mandatory only where the employee has five or more years of service and the employer has a global payroll of at least $2.5 million, or closed a business and severed 50 or more employees within six months. Notice applies far more widely.
Do you get severance pay if you are fired?
Usually yes, if the dismissal was without cause. Nothing is owed only where the employer proves wilful misconduct, which is a higher bar than most employers assume when they allege cause.
Is severance pay taxable in Canada?
Yes. Severance is employment income and is taxed as such. Part of a payment can sometimes be transferred to an RRSP, and how a settlement is structured affects the tax on it, so ask before signing.
Can I negotiate my severance package?
Almost always. An opening offer reflects what the employer hopes to pay. A counter supported by your agreement, your service record and comparable awards is what moves it. Short service is still worth checking, because common law notice can exceed the statutory week.
How long do I have to make a severance claim?
Generally two years from the termination date for a civil claim, and two years for an Employment Standards Act complaint. The signing deadline on your offer will arrive long before either.
SPEAK WITH AN EMPLOYMENT LAWYER TODAY
If you are facing wrongful dismissal, workplace harassment, or another employment dispute, our employment lawyers help individuals across Ontario understand their rights and pursue fair outcomes.