Severance Review / Negotiation
Severance Review Services
Most employees are entitled to “reasonable notice” of termination under the common law. “Reasonable notice” or the “reasonable notice period” is the amount of time it is expected to take an employee to find a similar job somewhere else, taking into account the type of position they just lost (i.e., managerial, technical, professional, niche, etc.), how long they were employed with their company for, their age, what the economic conditions are like at the time of their dismissal, and many other case-specific factors. Most people are referring to the reasonable notice period when they talk about “severance”, and so we will use the term “severance” interchangeably with “reasonable notice” on this page.
Unlike the Employment Standards Code that states that an employee gets a set amount of notice based on their length of service, regardless of their role with a company or any other relevant factor, reasonable notice is determined by a judge on a case-by-case basis because no two employees or employment circumstances are alike. People often like to state that employees are entitled to one month’s pay per year of service for senior positions or good paying jobs, but that is not true. In some circumstances, an employee could be entitled to more than one month per year of service depending on the factors that a judge will consider in their case.
Severance Negotiation Process
Our lawyers have years of experience considering and analyzing these different factors that judges take into account and how they can affect reasonable notice periods. These factors are what our lawyers use to determine if your severance package from your employer is fair and reasonable under the circumstances, and by reviewing your severance package, your employment contract, and other relevant documents, we can tell you how the factors a judge would consider would apply to your situation.
We can provide you a great deal of information about how the law works in this area, in order for you to make an informed decision on your severance offer. We can evaluate the fairness of severance offers, and provide practical and strategic advice and representation if you wish to negotiate an increased severance package or other things. We have been able to get increased severance offers from employers in many cases, and we are strong, effective advocates both outside and inside the courtroom. Let us help you.
For employers, we can provide advice on potential liability and severance strategies, as well as advice on common pitfalls to avoid. We can of course also represent you in court. Let us help you.
Incentive Pay Services
Know What You Are Entitled To
For many employees in Alberta, different kinds of incentive compensation such as profitability bonuses, performance bonuses, stock options, commissions, RSU’s, PSU’s, STIP’s, LTIP’s, etc., are major components of their compensation.
These types of compensation are also some of the first things employers try to avoid paying to employees when the employer’s economic performance is lower-than-expected, or when they lay-off or fire employees.
Often, employers who try to deny these payments are in the wrong. Here are some general rules:
- If you already earned something during your employment but it just had not been paid yet, normally you would be entitled to it after termination;
- If you would have earned something in your reasonable notice (severance) period had you remained employed during that time, normally you would be entitled to it after termination of employment.
What Incentives are you Owed?
There are many exceptions and fact-specific modifications to the above rules, but they are the starting point. Employers will almost always claim, for example:
- That bonuses are “discretionary” and that a specific terminated employee would not have gotten one in the relevant year; or
- That an employee would have received low commissions in the relevant year; or
- That an incentive compensation plan does not allow payment to a terminated employee.
Despite these common employer claims, many cases have found that the claimed “discretionary” bonuses were not really discretionary, that an employee probably would have received normal commissions, or that the incentive compensation plans did not prevent payment of incentives to terminated employees.
We are skilled and experienced with these incentive compensation issues both during employment and after termination of employment. Let us help you.
- Employers often put tight deadlines on signing a severance offer. This is sometimes tactically motivated to put pressure on employees to sign quickly. Severance offers often state something like, “This offer is open for acceptance until [DATE]. If you have not accepted the offer by that date, this offer will be withdrawn and you will only be provided with the statutory minimum you are entitled to pursuant to the Employment Standards Code.”
- When employees ask for an extension of 1 or 2 weeks on the offer to “consider it” or “get legal advice”, employers often grant an extension. If you have a deadline for acceptance, you should seek legal advice immediately and it cannot hurt to try to get an extension (in writing is best) to give yourself a bit more time
- Often, the threat to give only the Employment Standards Code amount if an employee does not sign the initial severance offer, is a bluff. We can never say for certain up front whether something is a bluff or not, but the reason employers do not usually hold to that position is because they often know they have some liability and want to settle instead of taking the risk of a higher judgment and legal costs in court.
- Things are not always as they seem
- The fact that a contract appears to say you are not entitled to some form of incentive compensation does not necessarily make it so
- The fact that HR for your company says you are not entitled to some form of incentive compensation does not make it so
Severance Review / Negotiation FAQ
How much severance is a dismissed employee entitled to?
Severance is not the same for everyone, and it is determined on a case-by-case basis. The most common factors considered are age, years of service, and character of employment, but there are many other factors in different situations. It is worth speaking to an employment lawyer with skill and experience to identify the factors which help make the strongest severance argument in your case.
If my boss fires me just before I was supposed to get a bonus, do they still have to pay it to me?
In many cases an employer is still required to pay out the bonus after terminating your employment. You should speak to an employment lawyer to assess your specific situation and provide you advice.
My company just clawed back my bonus because of the bad economy. Can they do that?
Whether or not you are entitled to a bonus or it is truly discretionary depends on the facts of your case. In many cases, if your company has set a precedent of paying out bonuses each year, they may be required to continue to do so, despite difficult financial circumstances. Speaking with an employment lawyer can help you understand your legal rights and entitlements to a bonus.
If I was dismissed for refusing to get COVID vaccinated, should I be getting severance?
If you were dismissed for refusing to get COVID vaccinated, you may be entitled to severance if there is no just cause for dismissal. Whether there is just cause will depend on your particular case, but relevant factors include whether you have a disability or religious exemption, whether you work remotely, and whether you work in a setting with people who are elderly or have compromised immune systems.