Is My Severance Package Fair?

The Statutory Floor vs the Common-Law Range

Every severance evaluation starts with two numbers. The first is the statutory floor: in Ontario, the Employment Standards Act requires up to 8 weeks' notice (roughly one week per year of service) plus severance pay of up to 26 weeks for employees with 5+ years at employers with a $2.5M+ payroll; other provinces and the federal Canada Labour Code have their own scales. The second is the common-law range: absent an enforceable termination clause, Canadian courts award reasonable notice based on the Bardal factors — age, length of service, character of employment, and availability of similar work — commonly estimated at 2 to 6 weeks per year of service and informally capped near 24 months.

In the United States there is generally no legal right to severance at all — at-will employment means packages come from contracts, ERISA-governed severance plans, or company policy, with the WARN Act's 60-day notice applying to mass layoffs at employers with 100+ employees. That makes the written plan documents decisive: US employees should benchmark the offer against the plan formula, past packages given to similar colleagues, and any age-discrimination leverage (releases waiving ADEA claims must give workers 40+ at least 21 days to consider and 7 days to revoke under the OWBPA).

What a Complete Package Includes — and What a Release Takes Away

A fair package covers total compensation, not just base salary: bonus and commission (in Canada, Matthews v. Ocean Nutrition, SCC 2020, confirmed integral variable pay is included in notice damages unless plan language clearly excludes it), benefits continuation including disability and life insurance, pension or RRSP/401(k) matching, equity vesting that would have occurred during the notice period, outplacement support, and a reference letter. Benefits timing matters acutely — group disability coverage that lapses during a gap can be irreplaceable if illness strikes.

In exchange, the release you sign extinguishes essentially everything: wrongful dismissal claims, human rights and discrimination complaints, unpaid overtime and bonus claims, and often anything you have not yet discovered. Releases are enforced strictly once signed, and challenges based on duress or unconscionability rarely succeed. That asymmetry — a permanent waiver traded for a first offer — is why the offer in hand should be treated as an opening position, not a verdict.

When a Lawyer Letter Pays for Itself

Employment lawyers typically review a severance package for a flat fee in the low hundreds of dollars, and a negotiated demand letter often moves a first offer up by 50–300% — for a mid-career Canadian employee, the difference between 8 weeks and 12 months of pay can exceed a year's salary. The strongest negotiation levers are an unenforceable termination clause, excluded bonus or equity, weak Bardal-adjusted offers to older long-service employees, and benefits cut off before the statutory notice period ends.

Timing still binds you after the offer: wrongful dismissal actions generally have a 2-year limitation period in most Canadian provinces, employment standards complaints their own windows (Ontario: 2 years), and US discrimination charges must reach the EEOC within 180 or 300 days. Mitigation matters throughout — keep a dated job-search log, because reasonable re-employment efforts protect the full value of your claim while new earnings typically offset only the common-law portion, not the statutory minimum.

Related: Employment Law Wizards · Was I Wrongfully Dismissed? · Have I Been Constructively Dismissed? · Non-Compete Clause Review · Employment Law Wizards · All Legal Wizards