Tips on Negotiating Your Severance Package

Home » Blog » Discipline and Dismissals » Tips on Negotiating Your Severance Package

There’s no simple way around it – getting terminated from a job is not pleasant. Whether you saw the writing on the wall or it came as a total surprise, losing a job is always difficult. Employees often talk about leaving a termination meeting feeling dazed, and that they quickly begin to worry about how they will juggle their everyday financial responsibilities when they no longer have a regular flow of income.

The good news for you is that your termination meeting does not need to be the end of the conversation. Our role as employment lawyers is to advocate for you and to get whatever compensation you may be entitled to receive. This means we will work to obtain a better package than the one offered to you by your employer at your termination meeting.

At the end of the day, you want to know that the offer you received is fair, or that we will help you get more.

Hiring an employment lawyer means you don’t need to be directly involved in the negotiations; we will become the primary point of contact between you and your past employer. We will take all instructions from you though, and there are important ways you can assist us when we are negotiating a better severance package on your behalf.

Remember Your End Goal

Losing your job can be an emotional rollercoaster, and we understand there may be hard feelings towards your past employer. We are always happy to listen, however our role as your lawyer will be to get you the best settlement possible. Some of our clients are simultaneously seeking mental health support to deal with the emotional toll of their job loss, and we fully advocate seeking whatever medical help that you need to get you through this process. 

Even though there may be hurt feelings, we can assist by taking the emotions out of the negotiation strategy, and help you reach a settlement that lets you walk away with your head held high. We will advise you when we think an offer is fair and when it is not, but at the end of the day our mission is to help you move on from your past employer, and help you stay financially secure until you find a new position.

Focus on the Bottom Line

When we negotiate with your former employer (or their lawyer), we will first negotiate based on your total compensation, which may include everything from salary and bonuses to a car allowance or even a gym membership. The big-ticket items are obviously most important, but small ticket items may get lost in the shuffle if we find ourselves moving towards a lump sum payment package.

The reality of negotiating a termination package is that ultimately everything will come down to dollars and cents. Staying focused on the ultimate total is important: Once any settlement money is in your pocket you can use it to replace that gym membership or to cover that pesky cell phone bill that your past employer used to pay on your behalf.

Get Your “Paperwork” In Order

As we often say: Truth does not win cases, evidence does. It does not matter what actually happened but rather what we can prove happened. To work most effectively with clients, it is important that we have as complete a picture as possible. Any documents that you can provide us with will help fill in the background details and will aid us in telling your story when we make our initial offer on your behalf.

If there are issues such as allegations of misconduct, harassment, or other factors that would take the case beyond a “simple” wrongful dismissal, we need to know these details and what evidence your past employer has regarding these issues. You can help by compiling any emails, text messages, video recordings, and other evidence you may have.

Keep in mind that your performance and reviews are usually irrelevant when determining your final severance package. If your employment was terminated without cause, it does not matter whether you were the most decorated employee or if you received no recognition at all. Neither of these situations has any impact on your termination entitlements.

Document Your Job Search

We will walk you through how you should keep track of your efforts to secure a new job (known as mitigation. Keeping excellent records is key. If you find new employment quickly, it may be great news for your bank account, but it will impact our negotiation strategy. However, if despite your best efforts, you are unable to find a new employer, this may help strengthen our negotiating position on your behalf.

Lump Sum Severance Packages

As your employment lawyers, we will also discuss the benefits of negotiating a lump sum severance package. Employers will often push for a salary continuance package, which essentially continues your salary for a set period but also leave you strictly accountable to a job search. Should you find new work, your past employer could claw back a portion of the remainder still owed after you find new work. A lump sum payment may not have a duration  as long as a salary continuance package, but often it can has strategic advantages, as well and better tax implications (especially if you have room within your RRSP contribution limits).

Retain an Employment Lawyer to Assist

Lastly, we strongly recommend you hire legal counsel. While hiring a lawyer may be viewed as an unnecessary expense – especially during a period where your livelihood has been cut off  – we see it as a financial investment. We routinely see people try to negotiate their own severance package, and unfortunately they end up leaving money on the table when they walk away. The only decision worse than spending money on a lawyer when you just lost your job is deciding not to spend money on a lawyer and then missing out on a settlement that includes substantially more money. One thing to keep in mind when deciding to hire an employment lawyer is that a portion of your legal fees will usually be tax-deductible.

We routinely help employees negotiate severance packages, in efforts to achieve a better result. Hiring an employment lawyer means you will have a professional advocate in your corner. You will not be left scrambling on your own and wondering what you should do next. Lawyers can also threaten to push forward with litigation if negotiations stall; although 98% of all cases settle before trial, the suggestion of litigation can often be a helpful negotiating tactic.  

Contact us today to speak with one of our lawyers. We can help take some of the unpleasant stresses off your plate.

Other Blogs

Stuart and others on the team at Rudner Law are frequent contributors to the following sites: 

First Reference Employment Law Resources
Canadian HR Reporter Blog
Rudner Employment Lawyer In The Lawyer's Daily
Legal Matters Employment Law Canada

Fire Away With Stuart Rudner

Fire Away! The Employment Law Show

Rudner Law hosts a monthly Q&A show streamed live on Facebook and to Youtube.

Rudner Law's Employment Law Newsletter

Join our Email List

Stay Up To Date. Subscribe To Our Newsletter.