What To Expect in a Severance Package in Canada

Canadian employees who are dismissed “without cause” are usually entitled to a reasonable severance package.  This may not be the case if the employee signed an enforceable employment contract that contains a termination clause, though sometimes these contracts can be challenged.  Most other employees can usually expect severance arrangements based on “reasonable notice.”  The actual definition of “wrongful dismissal” in Canada is simply a failure to provide that reasonable severance package.  If you signed an employment contract or offer letter when you first started, that is probably one of the first things a lawyer will need to review.

Here are some of the key things to look for as part of a “reasonable” severance package.

Severance Pay or Salary Continuation:  It goes without saying that the most important component is usually the severance itself.  Employers can choose to pay over time, with or without some kind of claw back (or “mitigation”) clause, or in one or more lump sums.  In most cases, this is the most important part of the severance package and in many cases, different components are negotiable.  The severance must, at a minimum, include compensation for the relevant provincial employment standards amount.  For example, in Ontario, the severance package must provide for notice pay under the Ontario Employment Standards Act and severance pay, if applicable.   If you are Federally regulated employee (someone who works in a bank, telecommunications company, tv network etc.,) the Canada Labour Code would apply instead of the provincial legislation.  Beyond the employment standards amount, employees can negotiate the length of time, the trigger for mitigation, the payment schedule or other terms.  This is all aimed at ensuring that the employee is compensated as required by Ontario common law, which itself, can vary wildly for each employee.  This is the area on which appropriate legal advice should generally be obtained.  The period of time for which the employee is being compensated is generally called the notice period or severance period.  

Bonus:  Dismissed employees should usually be compensated for accrued bonus for the current year (if there has usually been an annual bonus), as well as bonus for the severance period.  Many employers are quite reluctant to include the prospective bonus as part of the severance package.  If the employee has been getting the bonus every year and can show that he or she would have continued to get a bonus if employment had continued over the severance period, the bonus should be payable.  There may be wording in the original employment contract that overrides this entitlement, but it is often worth trying.  If there is wording in an employment contract or agreement that deals with the bonus, this will be something that needs to be properly assessed and considered. Commissions and Variable Pay:  For dismissed employees with fluctuating pay, the test is what the employee would have reasonably earned over the severance period.  Of course all accrued amounts are owed to the employee, subject to the terms of the employer compensation plan.  Going forward, most dismissed employees should be paid severance on the basis of overall estimated earnings, not just base salary for the entire notice period.

Benefits, RRSP and Pension Contributions:  Severance packages should include arrangements that compensate employees for all components of their compensation.  Generally, all benefits, including extended health benefits, STD and LTD insurance, RRSP contributions, pension contributions, and other perquisites should be continue during the notice period – or the employee should be compensated for the value of any items that are not being compensated.  For example, most insurers will not allow employers to continue LTD insurance plans.  Employees should request compensation for the loss of this employment benefit.  Many employers will agree to include that compensation in the severance package.  Pension losses can be a huge component of a severance package, particularly if the employer had a defined benefit pension plan.

Car or Mileage Allowance:  If the employee had the use of a company vehicle, the general rule is that the employee is entitled to be compensated for the personal use component of the vehicle.  In other words, if the employee used the vehicle for personal use 30% of the time (and showed that on his or her taxes), employers can be required to provide compensation for this loss during the notice period.  Some employers will be more flexible in this area and will either provide employees with the use of a vehicle over the notice period or pay a reasonable estimate of the real costs of the vehicle.

Outplacement or Retraining:  Strictly speaking, an employer is not necessarily required to provide outplacement or retraining as part of a severance package.  However, an employer can be required to pay for the employee’s reasonable costs of “mitigation” if the employee incurs costs in trying to find other work.  As a result, many employers will provide direct outplacement arrangements at their expense.  Dismissed employees may be able to negotiate the type of arrangements that are being provided, the organization, location, and value of such services.  As well, dismissed employees can often arrange to have an employer pay for some upgrade or retraining courses if that will help the employee find new employment.  Though some of this may sound expensive for employers, overall, providing these arrangements may help the employer reduce the time period that it will take the employee to find new work and that might save the employer some money.

References:  Employers are not strictly required to provide helpful references though some judges may look at this down the road and award extra damages for an employer’s failure to do, even if the judge does not state that expressly.  Employees should ask for a mutually agreeable reference and an agreement that any reference requests will be answered in a manner that is consistent with the reference letter or summary provided.

Legal and/or Accounting Fees:  Most employers should be prepared to make some kind of reasonable contribution towards the legal fees of a dismissed employee.  Once a lawsuit has been commenced, the employer can be required to make these contributions if the lawsuit had merit.  Employers will often try to avoid a lawsuit by including payment for some of the legal fees in a negotiated severance package.

Waiver of Non-Competition Clauses:  Some employers may be prepared to waive or modify certain non-competition terms or clauses that were contained in a dismissed employee’s employment contract.  This can often be a tricky conversation.  It is usually more likely that employers will agree to modify a non-competition clause (that might have been unenforceable anyways) than to modify a non-solicitation clause, that may actually protect the employer’s business.  Telling an employer that you would like to go and take their clients’ business is not usually the best way to get a great severance package.  But telling an employer that you won’t be able to find any work because of an overly broad non-competition clause may be viewed as reasonable.

Other Perquisites:  Employers will sometimes provide for items like health club memberships, personal cell phone costs, professional memberships, private annual physical examinations, employer discounts and other items.  These items should be reviewed and considered individually.  Employees will also need to weigh the value of pursuing an item that may not be significant in comparison to the other items.

General Damages:  Most wrongful dismissal damages are fully taxable as if they were income.  The withholding rate may be lower (i.e. 30% if the amount is over $15,000) but at the end of the year, the employee will have to pay tax on the full annual marginal tax rate.  An exception is if there is a basis for some of the damages to be paid as “general damages,” which are non-taxable.  This, fortunately, is not applicable for most dismissals. I say fortunately because it would be a harsh world indeed if every employer who dismissed someone had also acted in a way that would warrant general damages.  Nevertheless, conduct that violates human rights legislation or  other “bad faith” conduct can warrant payment of general damages. It is very rare that employers will actually negotiate and pay these damages without an actual lawsuit or human rights complaint but it does sometimes occur.

These are some of the items to look for in a severance package, though entitlements to these items will really depend on the terms of the person’s employment, the length of service, the type of position, the existence of any employment contract or offer letter and a range of other factors.  A key factor is the likelihood of the dismissed employee finding new employment since all of these items are only really payable if they are arranged initially, or if the employee is actively looking for work and unsuccessful.  Dismissed employees who find new employment quickly may only be entitled to the applicable employment standards minimums.

There is no set formula for exact severance pay calculation.  Despite the fact that some lawyers might claim there is a very exact number if you plug a few variables into a “severance pay calculator,” that only produces a rough average, which may not even be statistically significant.  In most cases, there is a range, sometimes a fairly wide range.  Employees need to consider all of the different aspects of the proposed severance including which items are being paid and which are not, whether the severance is being paid as a continuance or a lump sum, and other related factors.

This list of items is provided only as a guideline for things that employees should consider when looking at a severance package that has been proposed.  In most cases, particularly when a number of different items are listed, employees should make the tax-deductible investment of obtaining proper legal advice from a qualified employment lawyer.


  1. don Clunie

    are you entilted to severance pay if you retire I was employed in the NWT and what is the severance pay

    • Ken Krupat

      Generally not, unless you can show that you were forced to retire (in other words, that you were “constructively dismissed.”

      • What if you worked for the Salvation Army for 10. Years and decided to leave do you still get severance pay

        • Ken Krupat

          Generally, you do NOT get any severance pay if you “decide to leave” unless you are forced to do so – or you can show that you had very good reasons for leaving – that would amount to a “constructive dismissal.”

  2. garnet siry

    I’ve recently been terminated from my job of 26 years.I’m waiting for the monetary part of the severance package. What would be a typical presentaion from the employer based on these years of service. What value limit should be the expectation using as a benchmark

  3. I was terminated today after 12 years with my employer. I was in a management role managing over 80 people in four different groups. I am 66 years old. I have been offered termination notice of 8 weeks and in addition a severance of 35 weeks of my current salary.
    Is it reasonable or do I have chances of negotiating more compensation? I will appreciate your initial advise.

  4. Aurelio Di nunzio

    I was a general sales manager at a company that was created as a sales company for 5 other companies. After 8 months the company I was running was disassembled and handed back to the 5 companies to do their own sales.
    I was told I did a good job and this was a strategic move. i reached my bonus for two quarters and was paid and set up the whole sales structure for the company . I am 53 yrs old and it took me a year to find this job. I was let go two months after my probation period of six month/
    what kind of severance should I be looking for?

    Thank You
    Aurelio Di Nunzio

  5. I have worked for same company (Fripp Insurance for the past 15 years but did leave briefly for six months to join another firm (between Sept 2007 and returned to Fripp in Feb 2008) when calculating the severance pay would mine go back only to 2008 or would it go back to the date I started (maximum 26 weeks)?


  6. Andrew Miller

    I am hearing different answers to the question “How long a severance period?” The situation: 50 years old, senior manager, 23 years service, good performance, job redundant based on head office restructuring. Company says 1 year for a severance period. I have heard 20 – 24 months is more common and considered reasonable/fair. thanks, Andrew

    • Ken Krupat

      Hi Andrew. There is no exact answer. Generally, it sounds like it would be more like 18 to 24 months. However, there could be factors that affect this including whether or not you have a signed employment contract in place, salary level, issues relating to dismissal and many other factors. We usually set up an appointment with people for about an hour or so to go through these things and provide advice. 1 year sounds like it would be low in these circumstances. Ken Krupat

  7. s quah

    work in company in tourism industry for over 6 years holding a position of a controller. company is now sold and i was offered 6 month working termination notice with a 3 months retention bonus. please comment if i am fairly treated?

    • Ken Krupat

      Could vary – but could be something in the range of 6 months. Would have to review with you. Please contact me if you would like to set up a meeting to review.
      Ken Krupat. kkrupat@joblaw.ca – or 416-593-0400.

  8. HI

    I just received a redundancy package as the company restructure. I am with the company for 5 years and 11 months as Superintendent position in mining sector. I received 5 weeks lieu of notice and 8 weeks severance payment. is this reasonable compensation?

    • Ken Krupat

      Janet that sounds low. Sounds to me like you should be entitled to at least 5 or 6 months’ compensation. I would have have to review everything with you. Please call or email if you would like to set up an appointment. kkrupat@joblaw.ca or 416-593-0400

  9. Ian Woodroff

    I am being layoff as of march 28 2013. She is closing down the company due to her husband dieing 15 months ago. She has express that she has lost interest and the will to go on since he died. I was with the company for 8 years and 3 months. Am I intitled to any severance. Thanks Ian

  10. Hi Ken, Great article.

    I know it has been the practice of my employer in the past to present a severence package to an employee and imply that if it is not signed that day then the offer will be reduced to bare minimum. The approach discourages any negotiation of the package. Is there any rule about how much time is fair to consider a severence agreement?

    • Ken Krupat

      There is no real set time limit. However, the real issue is whether there is really a reason to sign off. If you signed an employment contract when you first started, you might be stuck with a set notice period as set out in the contract. Otherwise, there may not be a reason to given in to employer intimidation tactics. You should probably try to get proper advice about the terms of the package.

      Ken Krupat

  11. Hi Ken
    Useful and accessible info
    I received a severance package of 6 weeks pay in lieu notice and additional 20 weeks of severance payment
    I worked for the company for 6 years and 10 months as Operation Manager in food processing industry
    Do you consider a reasonable package?
    Please respond

    • Ken Krupat

      It might be. Could depend on your age, salary level, circumstances of joining the company (i.e. whether you were recruited) and other factors. We would also want to look at whether they are paying salary contination, lump sum or some other way of paying – and whether they are including bonus, pension, benefits etc.,

      I generally set up an initial consultation for about an hour to review everything and provide this advice.

  12. A former colleague of mine is expecting to be part of a global downsize excercise at her employer. She has been there 18 years, but the first 5 were “contract” the sole purpose was to stay unde head count limits , but all source deductions were made, she was FT on the companies office. The degree of integration test to determine employee vs contractor would be very high.
    Is she then entitled to a package based on 18 years, or is her employer able to offer her only 18 years recognition.

    • Correction “is her employer able to offer her only 13 years”.

  13. Correction, “13 years recognition:

  14. steve

    Hi Ken,

    I am on maturnity leave until Jan 2014 and was informed my company is closing and laying off all 250 employees end next year. They explained to us that we will be notified when our individual end date 1) do they have to wait until i officially return to notify me? i.e it is legal for them to send me letter while i am on leave.
    2) I have only been there 2 years,should i brace myself for minimum or can i request more since it takes a long time to find a job?

    • Ken Krupat

      Hi. It is not actually “illegal.” If the dismissal has nothing to do with the fact that you are on maternity leave, then you do not actually get extra protection because you are on leave. You still might be entitled to better notice or compensation but this is something we would have to assess with you. We would have to look at whether you signed any kind of employment contract when you first started, your position type, salary and other relevant factors.
      Please call or email if you would like to set up an appointment to review everything.

      Ken Krupat

  15. do i get to keep my benifits

    • Ken Krupat

      Depends on the package you negotiate. You should either be entitled to the benefits or the value of them.

  16. Steven

    Thanks for the article. Was hoping you could shed some insight on the following situation. Terminated after 3 years of employment, senior managment role, relatively young (30s). Specialized line of work- may be difficult to find similar employment at this level. Was offered 8 weeks termination pay in lieu of notice. This seems low/unreasonable. Your thoughts would be most appreciated. Thank you in advance.

    • Ken Krupat

      8 weeks sounds low. Sounds like it should be more like 4 to 6 months.

      Please contact me if you would like to discuss further. Ken Krupat kkrupat@joblaw.ca

  17. I have just been informed that that due to restructuring my position has been eliminated. I have worked for this automotive parts manufacturer running the Canadian branch for almost 25 years (non managerial). I am 48 years. I will receive my package in a few weeks. Is it reasonable to assume that I should get somewhere between 2.5 – 4 weeks per year? And should I have a lawyer review it before signing?


    • Ken Krupat

      Hi. Thank you for your note. It sounds like you should be entitled to something in the range of 18-24 months’ pay including benefits, bonus etc., I strongly recommend that you obtain advice about this once you have the package. Legal advice to review a severance package is tax deductible and sometimes employers will pay. But there is a lot at stake and you would not want to accept something like this without making sure that you have not missed something important.

  18. Maria

    Senior Manager recently terminated “without cause” after 2.5 years. Squeezed out of organization by new management – treated poorly for last half of tenure – potential discrimination/harassment. Offered 2 weeks paid notice and 8 weeks severence. Should I push for more? Age – 50. Also, what happens if I don’t sign within the 7 days?

    • Ken Krupat

      You could be entitled to something closer to 4 to 6 months. This would depend on the history of events – as well as whether you signed a contract when you first started. You may want to consider meeting with someone to review everything carefully.

  19. Peter

    worked 10 years as supervisor (management) pharmaceutical company. Job abolished, no notice. Company offering 25 weeks severence, did not mention notice pay. I am 49 good or not!

    • Ken Krupat

      Peter: Sounds like it could be low. Reasonable argument that it should be more like 8 to 10 months – based on what you have told me so far. But I would have to review other details – including the reason – if any for your dismissal – and whether or not you have a contract.

  20. hailey

    i was just fired without notice from a my part time job and i have been working there 18 months and was wondering if i get severance? would really like to know thanks 🙂

    • Ken Krupat

      You should be entitled to common law notice or severance – though it may only be one or two week’s pay.

  21. In Quebec, is it possible to have a lump sum severance payment go untaxed, and pay the taxes accordingly when filing at the end of the year?

    • Ken Krupat

      The law requires that the employer withhold and pay the taxes.

  22. Kelly Ann

    I was let go without cause with13 years of service. I’m 43. I was offered 26 weeks severance total as per employment agreement. Can I still negotiate? There are many clauses in the employment agreement that have not been enforced by the employer.

  23. I believe the dept I currently work in will be downsized shortly, jobs will be going off shore. I have worked for the current company for 10 years. The company I work for was bought from another large company. I worked for the previous company for about 15 years the left as my husband was transferred to the U.S. I went back when we moved back to Canada and worked for three years before the buyout. Am I entitled to severance for the 15 years prior to moving to the U.S. or only for the three years plus the 10 after the buyout? P.S. I am 61 and live in Ontario.

    • Ken Krupat

      I would really have to review all of the circumstances with you to be able to answer this properly – including any employment offer/ letter you may have signed when you started.

      Ken Krupat

  24. The company I am working for is closing but I found a new job a few days before I should have received my notice. Am I entitled to any severance?

    • Ken Krupat

      If you found a new job before you received notice- and you left (resigned) you would not be entitled to notice. If you were given notice first, you would still be entitled to severance (at least the required amounts under the statute).

  25. Kara Lafleur

    The company I work for was sold in February 2013. We were told it was is stages and that the department I worked in didn’t have to worry we were safe for 4 years. Now Thursday Sept 5th 2013 we were informed that as of Sept 27th 2013 the company was been abolished. We were told they were going to give us severance pay as well and our papers would be given to us Monday Sept 9th 2013 and that if we wanted help to critique our resume’s they would help and give us reference letters. When I gave my resume’ to the Human Resources person she said I would be getting 8 weeks severance pay. My concern is my age and that I do have some disabilities. A floor supervisor said that I may be able to request more due to my age and the disabilities as I may not find a comparable job. I was wondering can I request more? I have been with the company for 9 years and 1 month.

  26. Hi I was just notified that my job will be changing to a directors level (from management) and I am not qualified for this level, so they are releasing me. If I find another job during the notice period do I still qualify for severance? I have a employment contract with my employer, which already defines the notice period as two months. I am going to start looking for work now.

  27. Robert A

    Workers who are paid hourly, their severance should be based on their annual earnings, not their hourly rate, workers who earned regular over-time hours would be compensated according to the total earnings. Is that correct?

    • Ken Krupat

      That is generally correct – under common law. Unless the employer can show that the overtime would have ended – because, for example, a major piece of work was lost.

  28. Elaine R

    i was notified of my only option to be terminated in a meeting where i was attacked by minor performance issues. i’ve been at this company for 9 years and 10 months. i would have been eligible for 10 year bonus in March and 5 wks vacation in January. there was no definite termination date set. it was left that once i negotiate and sign off and sign release then its ended. after the weekend i was provided with a letter and some payout numbers for min. severance (9 weeks) and pay in lieu of notice (8 weeks). is this a good package? can i negotiate the weeks of severance given my 10 years of seniority? also when joining the firm it was agreed i could carry over 6 years of seniority from another firm which they claimed was used for ‘vacation’ purposes. can i seek compensation for this?

    • Ken Krupat

      A total of 17 weeks sounds like it could be quite low, but it would depend on your particular circumstances. I generally set up an initial consultation to review everything and provide advice. Please email or contact me if you would like to set up an appointment.

  29. Scott Thompson

    Hi Ken
    My better half has just received a severance package after 26 years working for a major insurance company. The severance seems quite fair, but the company has been contributing to her pension plan for 26 years. (The employees did not have to contribute.) My questions is. Does she have to move her pension funds or can she simply leave them with the company and still collect a pension after she’s 65?
    Thanks Ken

  30. How do you negotiate to remove clawback from the package. Will a letter suffice. Does going through a lawyer help in success rate.

  31. I work at a large Oil & Gas company in Calgary and have been notified of impending layoffs. I have been employed with this company for 33 years and am 52 years old. What should I expect to be offered in the way of severance? Should I accept the offer or do I have recourse against a large layoff?

  32. Worked 2 + years. Senior Sales position. Laid off approx. 3 weeks prior to Christmas. No reason/restructuring. I had hit my budget. Offered 12 weeks pay. Given the nature of the holidays, hiring is really in a “dead zone” until at least mid January. Do you feel 12 weeks is fair? I want to ask for 20 weeks??


    • Ken Krupat

      You could be entitled to more – perhaps as much as six months. However, this might depend on what type of employment contract you signed when you started. As well, salary and age could be relevant. We generally set up an appointment to review these things individually and to be able to provide advice.

  33. sandra jackson

    i have been employed 28 years with this company and several of us have been given termination notice dated nov 26 2013 and will run thru that date and may 23 2014. however they are not telling us what our severance pay will be until the end of feb 2014. is it possible that they could inform us then that it is a ‘ working severance’ (if that exists) or will they be obligated to pay us a severance at all seeing as though they have given us almost 6 months notice. this is nation wide termination at the large retail store. thanks

  34. hello,
    I work for a credit union in Ottawa. About 500 people. 33 years of tenure , most recent 14 in Telecommunications – 55 years old. Very solid reputation. Company is wildly restructuring. Very worried my days are numbered. Planning 62 as retirement. Some say, if I am a target, it would be cheaper for them to keep me than lay me off. If I were laid off, I hear anywhere from 2-4 weeks per year as severance. What could I expect if heaven forbid, it did happen? Thanks, Dave

  35. Mark Holmes

    my position with an prominent quebec based newspaper company was eliminated recently as a part of corporate restructuring.
    i had 33 3/4 years with the same company. What should i expect as a severance package. I have been in management for 27 years the most recent 4 years as a publisher in one of thier small daily ontario newspapers. please advise

  36. What happens to a 5 month severance package paid in lump sum if you find a job after a month? Do you return the the rest?


    • Ken Krupat

      Generally, this depends on the deal that you have signed. Most lump sum proposals are “no strings attached” – which means that if you find a job – you get to keep it. However, this does depend on the specific terms of the agreement. If you haven’t signed it yet, you may want to have it reviewed.

    • Ken Krupat

      It really depends on the terms of the package. In most cases, you would be fine.

  37. Hi,
    In my severance package former employer is requesting me not to communicate company’s customers. Otherwise they will stop my severance package divided into monthly payments. Is that legal?
    Due to my professional background if i want to search for a new job i have to send resumes to companies who are their customers.
    Thank you

  38. Hi,

    I have been a casual at a company for 5 months and have been laid off just before the holidays (last day Dec 20). Was told would get paid for holiday, but it’s not on the paycheque. Am I entitled to be paid for the stat holiday?

    • Ken Krupat

      You would have to check with your local Employment Standards legislation. I am not even sure from your note whether you are regulated by Federal legislation or the legislation of one of the different Canadian provinces. Check with your local employmnent standards office.

  39. Victoria

    Hi Ken:
    Received a “no just cause” severance package from my employer of 25 years, paid as lump sum as of Dec 2013; I now have a job offer from another firm to start in February. Do I have to return the remainder of the severance back or keep them (is that double dipping?)? My contract only stated if do return to the same entity that I have surrender the balance.Maybe I am just reading too much into this . . .

    • Ken Krupat

      Victoria: It would really depend on the paperwork that you signed. In most cases, if you receive a lump sum, you would then be free to do as you wish. However, this may be dealt with in your severance agreement or release. I would need to review these documents to provide proper advice.

  40. Alejandro


    I was laid off last Friday after working as a sales associate for this company for 29 months in a full time position. The business was doing bad this season so my boss decided to let me go because of shortage of work, the payment in lieu of notice was only 2 weeks and no severance or anything else. I am 30 years old and I was working in Ontario.

    Do you think that I can do something about it?

    • Ken Krupat

      You may be entitled to more notice or compensation. However, this could also depend on whether you signed an employment contract when you first started and what was included in that document. We would need to review any employment contract that you first signed to give you proper advice. We would also need to discuss with you the other aspects of your employment – including overall earnings. If you did have a valid, enforceable contract with a provision limiting notice, you might be entitled to two or three months’ additional compensation.

  41. Ken Krupat

    Hi. Unfortunately, I’m just not able to answer all of the questions that you might have in this type of forum. I generally set up a consultation with people to review everything and provide advice. I do charge a consultation fee for that appointment. Please let me know if you would like to set up a consultation. Best of luck. Ken Krupat

  42. if a company is bought out, does the new company give out severance packages based on years the employee is being terminated (through no fault of their own) for length of time he/she was with previous company? or does it mean the employee gets no severance package at all?

    • Ken Krupat

      In most cases, the employee should be entitled to severance from the new company recognizing the employee’s full service – or from the old company and the new company. It depends on the type of transaction and what type of letter the employee is given, if any, at the time of the changeover. This can vary with the particular circumstances.

  43. I was terminated this week from a large retailer after 10 yrs as job are being outsourced The total lay off in my building was 300 with a further 500 coming over the next months. I was offered 12 week termination pay to be paid over the next 3 months and if I find employment before that time I have to reimburse any amounts I make. I was also offered 10.wks severance at the end of that period. The labour board informed me that termination is to paid in a lump sum and the employer cant take back amounts offered. Is my offer fair and legal?

    • Ken Krupat

      Thank you for your comment. I would have to review everything to be able to provide you with proper advice. 12 weeks sounds low.
      I generally set up an appointment to review everything.

  44. Working for a very large corporation for 9 years and 3 months. Expecting a lay off notice/package…what should i expect . I dont want to get ripped off as I heard some stories.

    • Ken Krupat

      There could be a range depending on various details including your age, type of position, salary etc., Generally, it sounds like it could be anywhere from 9 to 12 months. But it could also depend on whether or not you signed an employment agreement when you first started. You should probably get some legal advice when you get the package.

  45. Ken Krupat

    It really depends on the type of job, the salary level, whether or not she was recruited – and other factors including whether or not she signed an employment contract when she started. These are all things that would need to be approved by lawyer.

  46. My branch of a much larger office is closing in 4 weeks and I have only been there 4 years, so ESA indicates that the 4 weeks’ notice was all that I was owed (plus my unused vacation will be paid out). I can find work but maybe not at a comparable salary. Am I entitled to anything more from my current employer?

    • Ken Krupat

      ESA is not necessarily relevant. You could be entitled to 4 to 6 months’ notice or even more. We would need to review any employment contract you might have signed when you first started. But there is really no reason you should be left with ESA minimums only – unless you signed an enforceable employment agreement that says so.

  47. Are employers required to include statutory holiday pay in the salary continuance?

  48. Are employers required to pay statutory holiday during salary continuance?

  49. Wendy

    the company I work for is being sold . Management is not in the purchase agreement. So after 18 years of managing this company what should I expect.

    • Ken Krupat

      Hi there. There is a range of what you might expect. It could be anywhere from 18 to 24 months depending on the type of position, your age, salary, whether or not you have a contract in place and other related factors. We usually set up appointments with people for about an hour or so to review these things and provide advice. Call or email me at any time if you would like to set up an appointment.

  50. Hi, I have worked for a bank for 26 yrs and now they are discontinuing my job title. They stated that if I didn’t find a job position within the bank I would be offered a package. I was given 1 years notice and put on what they call overrun (is that what they call working severance?)and just served a letter yesterday stating that I will be out of a job Sep 30, 2015 and that the package information will be available Mid-late July. Can you tell me what a I should receive for a severance package?


    • Ken Krupat

      I would have to review all of the details with you. However, it sounds like you should be in the range of 20-24 months. We generally set up a consultation with people for about an hour or so to review everything and provide advice. Please contact me if you would like to set up a meeting – kkrupat@joblaw.ca.

  51. Hi Ken

    I’ve been employed part time with a company in alberta that gave us 8 weeks notice. I found another job 18 days before the closure, am I still entitled to my severance package even though I found another job?

    • Ken Krupat

      If you already signed off and agreed – it would depend on the terms of the agreement. If not, you may only be entitled to the Alberta minimums.

  52. I was working for a dental office the owner went missing so I no longer had a job. Now his estate is being settled am I entitled to severance.

    • Ken Krupat

      This could be a bit complicated. If the practice is not being continued, you might not be entitled to anything. It could be considered “frustration of contract.” However, there may be arguments that you are entitled to come compensation from the estate.

  53. I’ve been on LTD since 2008. A week ago I received an offer of a lump sum settlement of my LTD benefits. My employer informed me that acceptance of the offer will mean that I’m terminated and will not be entitled to severance, since I am being paid by the insurance provider. At the time of my illness I had been with the company for 20 yrs. Is it reasonable to be denied severance?

    Looking forward to your answer. Thanks Ken.

    Submitted: October 22, 2015

  54. Hi, I worked in a warehouse company for 18 years and 2 months. Im 58 years old and have health issues this past years (High Blood Pressure). The company now is strict and I don’t get a raise since my production does not meet there standard They told me they will fired if I will not improve my production. My question is do I get a severance fee during the time when I was fit and healthy . Please email me thanks

    • Ken Krupat

      You might have a claim under the Human Rights Code for breach of the Code. You may also be entitled to quite a bit of severance based on your full annual income.

  55. Kathi Britten

    I have recently been laid off due to my company not requiring the position and for company finacial reasons. They have offered me 8 weeks + an additional 32 weeks severance package. If i find employment during the this period i am only eligible for 50% of the package. Is this normal practice in BC. They have also extended my benefirs till Aug 2016 or untilmi find employment.

    • Ken Krupat

      This is a common way for employers to deal with severance – but you might be entitled to a longer period of time. It would depend on a number of different factors including your age, length of service, salary etc., You probably want to go through this with a lawyer before signing off.

  56. Employed for 7 years with an agreement with employer to pay x amount yearly for x amount of hours. Pay is bi-weekly in equalized payments (salary but with hour/yr agreement). Most hours are worked in the first 4 fiscal months which is now. Company now is being sold. Would my severance pay be based on those equalized payments or actual hours worked? I’m worried because if broken down to $/hr, I would be at a very large loss if compensated with 5 weeks severance based on the equalized payout. – Alberta

    • Ken Krupat

      The pay should normally be based on your overall annual income. You may need to sit down with an employment lawyer and review everything. Best of luck.

  57. Hi,
    I just recently involuntary quit my landscaping job as a supervisor due to harassment, discrimination,loss of job duties,deductions off my pay without notice and paycheques continuously fluctuating while on salary( and much more). All of this started while being off under doctors care. I’ve worked there over 3 1-2 years. I’ve been offered 2 weeks severance with stipulations if I do not go the labour board route and also Human rights. Is this fair?

    • Ken Krupat

      It really depends on all the details. If the harassment and discrimination was really bad, and can be proven, you could be entitle to quite a bit more money. You may want to sit down with a lawyer to review everything.

  58. Good day, I have been terminated without prejudice after 15 yes 8 months of tenure, I have managed several divisions for over 12 of those years. The package laid out is 37 weeks not including 8 weeks termination notice. As well the the employer has laid 50% of balance owed once employment is found. I am 45 and in a poor economic market. Is this reasonable?

    • Ken Krupat

      Whether a package is reasonable or not depends on a rang of circumstances – including the history of your employment, salary level, age and other factors. Sounds like you could be in the 12 to 15 month range – although it is generally reasonable for employers to include a “mitigation” clause. I would have to review all the details to be able to give you more extensive advice.

  59. Hi Ken,

    I’ve been at my career for 28 years and am age 53 in a non union environment. Things are looking bleak and stressful for me since the workload is 4 times what it was 10 years ago. Management is constantly monitoring the office for visibility and waving an axe when the profits and forecasts are low. I think my clients like me because I produce excellent results for them but I am feeling the development of mental health problems due to the workload and a feeling that the company has a “personal merit” issue with me due to my candor which is keeping me from moving up in the company.

    Could you provide some guidance about what I can expect when my time comes? Should I expect some blowback if I was to ask for early retirement?

    • Ken Krupat

      Hi there. There is a range of what you could be entitled to if you are actually dismissed or let go. It could be 20-24 months. However, if you ask for early retirement, they are not necessarily obligated to pay you anything. As well – they could try to low ball you on the severance. If you are suffering mental health problems, you may want to consider your employer’s STD or LTD policies – if they have them. In general, however, the mere increase in workload – even a significant increase – may not be a “constructive dismissal.” I generally set up consultations with people for about an hour or so to review these types of things. Please contact my office if you would like to set up an appointment. Best of luck.

  60. Can I be forced to sign a employment contract after I have been working for the company for over 20 years? And can they force to sign that I can only get max 2 years severance if I am terminated ? Does not seem legal?

    • Ken Krupat

      Hi. In general, they can’t force you to sign the agreement. However, if you decide not to sign – they could terminate your employment – and pay you “reasonable notice” which is likely to e in the range of 20-24 months. I would have to review the agreement with you in detail to be able to provide advice as to best steps going forward. You can call me at 416-593-0400 if you would like to discuss.

  61. Dear Sir,

    I resigned from my company and joined another company. I was enrolled in a bonus plan for 15% of my base salary. I have worked for 11 months of that 12 months and there is no language that states that I must be employed with the company to get the bonus. Am I entitled to receive prorated bonus if I worked for 11 months. Company pays part of the bonus every quarter. I had 4 offer letters from the company and all of them state the same. Out of the 4 offer letters 2 were promotions. If I am entitled, what would be my next step if the company refuses to pay me? Can they refuse to pay me even if they do not have any letter or wording in the letter about not paying my bonus if I leave the company?

    • Ken Krupat

      It sounds like you should be entitled to some bonus payments. However, this could really depend on the exact wording in the employment contract you signed and/or the bonus plan. I would have to review all of these letters. Depending on the amount involved – it could then be a matter of a letter or two from our office – or it could be a lawsuit in small claims court – or the Ontario Superior Court – depending on how much is at stake.


  62. 34 years with company. Technical position non-management. 72 years old. Was offered 18 months severance. Just wondering whether it’s worth it to go back and ask for more. No cause for layoff.

  63. Hello,

    I’ve been terminated without cause after 14 years. My position was Technical/Project Management with a consulting engineering firm. Performance ratings were good thought time with company. Currently 43 years old.

    Highlights of proposed severance package seems fair at first glance, but looking for generalized opinion if you don’t mind.

    -Salary continuance for 50 weeks total
    -All company benefits with the exception of LTD
    -Vacation time payout
    -No mention of non-compete clause

    Thank you.

    • Ken Krupat

      It sounds like the right package could be in the range of 12 to 15 months, possibly as much as 18. However, assessing the package depends on looking at all of the various items. Benefits, bonuses (if any), whether it stops if you find other work etc., We generally set up a consultation to do that for about an hour or so.

  64. Hi – After 18.6 years of service as a professional employee (plus 1.5 years earlier as a contractor)I have just received a severance package + notice of 44 weeks. My employer is a publicly traded retailer. As a 56 year old woman I believe it will be difficult for me to find a job in that much time. I do not want any hassle, is their offer reasonable given the circumstances?

    • Ken Krupat

      It sounds low to me. Sounds like it could be in the range of 12 to 15 months at least, possibly as much as 18. We generally set up an appointment to review everything and provide advice. My suggestion would be that you contact our office to arrange a one hour meeting to review everything. 416-593-0400 or kkrupat@joblaw.ca.

  65. I worked 10 years in Alberta in a Senior Management role and role is being eliminated due to downsizing in the Operation. Company is offering me a different role in the company that I am not interested in and would be a reduction in salary.
    Am I eligible for severance in this situation or not due to being offered another position in company.
    Thank you.

    • Ken Krupat

      Would really depend on the type of role that has been offered. I generally set up consultations to review this type of situation and provide advice.

  66. If I get fired im in a union for 23 years why am I not intiled to severance and why is the union the only one that can defend me can I have a lawyer in the meeting with me ?

    • Ken Krupat

      The union may be able to file a grievance and get you your job back. However, under Canadian law, the union is the only one that can generally do that – rather than your own lawyer. However, the union must agree to represent you fairly.

  67. I work in the investment industry, with the same Rep. for 17 years. Just over 2 years ago we moved our book of business to a Charter 1 bank. My position has just been terminated due to lack of performance on my Rep’s part. I’ve been offered a 8 wk severance with option to take 70% lump or an employee continuance pay with benefits, minus 50% if I find other employment. This is very fair as far as the bank is concerned, but am I entitled to severance from the Rep. for the other 14+ years we’ve been working together?

    • Ken Krupat

      It sounds like you would want to figure out who is paying the severance before signing off or agreeing to anything. I would be happy to set up a consultation with you to discuss. Hard to recommend signing for just 8 weeks’ severance after 17 years.

  68. Extremely Frustrated

    I’ve have been employed as a Project Manager with an engineering firm over the past 10 years.

    Not one disciplinary problem.
    Been very successful managing projects and receiving bonuses.

    Over the past year I was diagnosed with a degenerative disease and went on LTD. My employer has just informed me that they can not accommodate me due to my disability and they have terminated my employment effective immediately. What type of compensation should I be looking at? How does this affect my LTD with the insurance company?

    • Ken Krupat

      I would really have to review everything with you. You are entitled to accommodation to the point of “undue hardship” under Human Rights legislation. However, if you cannot return to perform any work – you may only wind up entitled to statutory entitlements. This should not affect your ability to continue receiving LTD. However, they would need to make significant efforts to accommodate your illness.

  69. Steven Bobier

    is it common practice for employers to say “you get 50% less severance in a lump sum if you find other employment?”

    is it legal?

    • Ken Krupat

      It is very common. The reason, as I have explained in my articles on this site, is that employers do NOT owe severance if you find other work. By paying 50% of the remainder – they are actually giving you money that you would not be legally entitled to receive if you had not settled with them. They do this because they would rather have the certainty of the deal than wait and see how long it actually takes you to find other work. But they are under NO obligation to simply pay the whole amount as a lump sum at the time of severance.

  70. What does “2 weeks for every year of service” mean? If i have 28 yrs of service would I be paid bi-Weekly for 28 weeks?

    • Ken Krupat

      It sounds like you would be paid for 56 weeks. However, I would really need to review the document to be able to provide you with proper advice.

  71. Darren Tong

    Hello. Under the terms of my severance package I received, it states that i am entitled to receive incentive compensation (i.e. bonus) for fiscal 2016 (October 31). I have received an amount every year during my 4 years of service. In order to receive my severance I must sign a release precluding any potential future legal action against my former employer. My question would be what happens if the incentive compensation ends up being zero after I sign the release?

    • Ken Krupat

      Obviously you would want to pin them down as to the amount that you would be getting for the bonus. You should ask them to ensure that it is based on past results. You should also be entitled to bonus money over the future severance period.

  72. I work F/T for a major Bank here in Toronto for past 38 years. Flawless employment and in Management position. Is it possible the employer can terminate my position and present details on a severance package while on STD?

    • Ken Krupat

      It is possible – especially if they can prove that the termination had “nothing to do with the STD” – i.e. some type of major restructuring. However, you could wind up with a claim under the Canada Human Rights Act or other claims. We would really need to review this with you to be able to provide proper advice.

  73. sam soman

    Is it mandatory that the employer withhold taxes from the severance amount pay to the employee? If the employee directs the employer to put the money directly in his or her RRSP account must taxes still be withheld?

    • Ken Krupat

      Generally, employers MUST withhold taxes from the severance amount. However, if you have RRSP room available and you have not contributed to use up that room, you can ask the employer to pay an amount directly to your RRSP with no deductions on that amount. As well – if you are a long service employee and were working for the employer before 1994, you may be able to contribute other amounts.

  74. Rachelle Mendoza

    Been working for 24 yrs and 7mos. In a company as forklift driver, Will I be paid as a retiree?

    • Ken Krupat

      Generally – retirees are not paid anything to retire – unless there is a pension plan or RRSP or some other retiree plan. You cannot be forced to retire. If you continue working and are asked or forced to retire – you may be entitled to severance and may have other claims. However, if you simply decide to retire, you normally do not get any payments.

  75. I’ve been with current employer for 26 1/2 years, and the company is negotiating a merger relationship with another company, in a different province. Our office will be closing, so being told we’ll get severance packages. I will expect 26-30 months, as senior management executive, currently 56 years of age. Heard rumblings they’ll structure a payback if new employment is found. What does that do to me if I get an offer from a new, somewhat tenuous company, I pay back the severance portion, and then the new company can’t afford me, or goes into financial difficulty and has to let me go? I’m out my healthy original severance. Can a longevity clause be written into the original severance to protect me from a quick turnaround in a new job?

    • Ken Krupat

      Generally, the company only owes you the severance if you are unable to find other work. For the most part, the highest awards in Canada have been 24 months, with only a few exceptions. Ultimately, you are not entitled to severance if you find other work – and you are required to look. Some issues can be negotiated at the outset – and some companies are more generous than others in the types of clauses that they will negotiate. You can try to negotiate this issues – and you can also try to negotiate a signing bonus from a new potential employer.

  76. I’ve been with this American company for 25+ years. Looks like they will be pulling out of Canada due to profitability issues. I am 53 year old outside sales rep & was not expecting this. If the time comes, what would you say is a reasonable severance package?

    • Ken Krupat

      It would likely be in the range of 20-24 months. Overall compensation level would have an impact on it. But the company could offer less as a lump sum (with the idea that you might find other work). Or it could offer the package subject to “mitigation” meaning that if you were to find work, you would receive a lower amount. If and when you receive a proposal, I strongly suggest that you make an appointment to have it reviewed.

  77. I have been packaged off after 111/2 yrs. supervisory position. They have offered
    8 weeks standard pay/benefits and the balance “retirement allowance”, for a total of about 13
    Months. I’m 21 months away from turning 65.

    Does this sound reasonable?

    • Ken Krupat

      Sounds quite low to me. You could well be entitled to something closer to 9 to 12 months’ compensation, rather than such a low amount.

  78. If you agree to a severance package, that includes the employer continuing to pay salary up to xx weeks (not a lump sum payment), do payments stop if you take new part time or full time work?

    • Ken Krupat

      It depends on the agreement you signed. You really should get a legal opinion before signing any severance agreement – and then before accepting a new position.

  79. Trudy Moffatt

    2 very kind older people in Saskatchewan were just fired and walk out the door with no cause and no notice. They were told their severance package is 14 weeks pay for 14 years of service. Both are in their late 60’s early 70’s. Both were given no notice and both have almost no way of be employed somewhere else. They were told they need to sign their agreement right away. I feel terrible and don’t think this seems right. I would like appreciate your opinion.

    • Ken Krupat

      They could be entitled to as much as 12-15 months’ compensation – but it really depends on type of positions, the salary, and other factors. They really shouldn’t sign without speaking to a lawyer. Their best best would be to try and see someone in Saskatchewan as it may not be economically viable for me to help them – though I would be happy to.

  80. I am a 60 year old, 42 year employee of a major financial institution who announced that through upcoming restructuring, my position will be eliminated later this year. I am in a management position and have received exceptional annual reviews and planned on working another 4 years. I’ve been informed unofficially that no severance packages will be offered and I’m concerned and unsure how to prepare for what is expected to be a long costly legal battle. Any advice on what I should be doing now to be in a better position come October would be greatly appreciated.

    • Theresa

      Are questions selectively answered based on the content? Just curious why mine didn’t receive a response.

      • Ken Krupat

        I try to respond to everything. Sometimes things are very busy and it takes a bit longer. I have responded to your inquiry below.

    • Ken Krupat

      From what you have written, it sounds like you should be entitled to severance in the range of two years’ compensation, possibly more than that. You would not be likely to get 4 years’ compensation. Most lawyers can work with you to make sure that taking legal action is affordable and makes sense. Please contact me at any time if you would like to set up a consultation. kkrupat@joblaw.ca.

  81. William Blair

    I have worked for an airline in Flight Operations for over 27 years.
    My age is 75yrs. If I retire now should I receive severance pay and
    how much should I expect?

    • Ken Krupat

      Generally, people who retire in Canada are not entitled to any severance. The only exceptions are – if you can prove you were forced to retire (in which case you could be entitled to quite a bit) or if you have a contract or term of employment (or collective agreement) that says you get paid if you retire. Otherwise, you don’t normally get anything.

  82. Federal Police Technician for 32 years and 2 years from 55th birthday. Being forced by a unilateral change to no longer be a member of the Police Force and become a Public Servant. Pay and benefits will be similar but will be part of a Union. Government gave out the accumulated “Retirement Severance” a few years ago providing me with 24 weeks “Severance”

    Should employer offer a substantial severance regardless of offering a similar job under a new contract?

    Can one leave with a possible severance for 24 months then retire with pension earned while working after severance has run out?

    Can employer refuse all severance sighting the previous “Retirement Severance” payout as fulfilling obligations?

    • Ken Krupat

      Unfortunately, this sounds too complicated for me to review and answer in this format. Would need to set up a consultation with you to review all of the background, paperwork and details. If you are part of a union, you would need to deal with this through the union.

      • I understand.

        Not part of a Union. No one to bargain for us. Just Treasury Board dictating our new terms. Being forced into a Union, not our choice. Ironically we were happy not to be represented by a Union for over 50 years. Not the Government of Canada is mandating we join a Union.

        • Correction, “Not the Government of Canada is mandating we join a Union.”

          Should have read, “Now the Government of Canada is mandating we join a Union.”

  83. Richard

    i work for a bank for 10 years which has slowly been outsourcing various groups for the last 2 years. Past employees have been given approx. 1 month for each year service. As one of the last full time permanent employees to receive a package i find they are only giving 3 weeks per year. What can be done to get a comparable payout without legal litigation? Thanks.

    • Ken Krupat

      You may have to sue them or file a complaint with the Canada Labour Code to get the package improved. We are sometimes able to negotiate a better deal without litigation but that really depends on the circumstances. Please contact me if you would like to set up an appointment.

  84. Heather

    My severance package is 6 weeks from the termination date + an additional 3 months. (this is the exact wording on my severance letter) The 6 weeks takes me to March 31, 2017 so I was expecting payment to be for the complete months of April, May and June and wanted confirmation that I would be paid to June 30, 2016 and am now being told that the 3 “months” is actually 12 weeks and my payment will be finalised on June 27, 2017. Can you advise, legally, if even though it was phrased as months my employer can calculate it in weeks?

    • Ken Krupat

      A month is legally 4.3 weks – so they can’t switch 3 months to 12 weeks – it is 13 weeks.

  85. Wondering….time lines……how long after being dismissed does a company need to get a severance package together and provide it to you?

    • Ken Krupat

      You are supposed to be given termination and/or severance pay within two weeks (in Ontario at least). However, there is no set rule about timing for a severance package. You have up to two years to go after the company (in Ontario).

  86. Barkley

    Hi. I had worked for a company in an uppermanagment position for 21 1/2 years. The company offered me 10% shares and to stay at my same earnings if I would set up and manage a new store for them. After eveything was set up and running for 11 months they backed out on all the deal my wages were 10000 less because of bonuses not being paid and now they have sold the business and terminated my employment. They offered to pay me 6 months but said if I didn’t accept it and wanted to seek legal advice it would only be 8 weeks. Any advice?

    • Ken Krupat

      Sounds like you could be entitled to quite a bit more than 6 months – however it would really depend on the various details. I generally set up meetings with people to review these things and provide advice. Please let me know if you would like to set up an appointment. Kkrupat@joblaw.ca

  87. Diane Smith


    I am 50 years old worked for tge company for 36 months. I was given a release letter with severance pay etc and told it needed to be signed by Monday.

    Can you please advise if this is correct because I am being told if it is not signed by Monday the letter won’t stand.

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