Legal Insights / Fees / Severance Package Review

Severance Package Review

Mar 26 2024

We understand the loss of a job can be highly emotional and stressful. Often employers will give you only a short time to review a severance package. We’re here to help.

In BC, unless the employer has “just cause” employees are entitled to advance written notice that their job is ending or to be paid out in lieu of notice; this payment is commonly referred to as “severance”. It is important to know that the BC Employment Standards Act sets out mandatory minimum requirements for notice and often an employee’s legal entitlements are significantly higher.

The below options are if you were terminated without cause or “laid off”. If your employer is alleging “cause” for termination, we will be happy to set you up with one of our experienced employment lawyers for an initial consultation. More information about Initial Consultations can be found here:

How much notice am I entitled to?

The first thing we look at is any offers of employment, written contracts or employee handbooks to see if there are any termination provision and what they say. Even if these exist, they may not be enforceable. The exact wording of any termination provisions is very important as are the circumstances of how you received the document(s).

If there is no written contract or the termination provisions aren’t enforceable, then severance is determined based on an assessment of what the court has found to be reasonable notice for an employee to find alternative employment based on similar facts. This is more of an art than a science as a number of factors are considered, including age, length of employment, industry, type of role and level of compensation.

Another matter that may impact how much you are entitled to is how quickly you find a new job. In general, employees have a duty to act reasonably in searching for alternative work after termination. This does not mean you have to accept any job that is available, but you also cannot take no steps to find work or turn down comparable opportunities in an effort to bolster your claim for damages. If you do find comparable alternative employment during the notice period, typically the income earned would be deducted from the compensation that is owed.

Our team of experienced employment lawyers are happy to offer three options for severance package reviews to fit your needs.

1. Notice Assessment Report

What’s included: after providing us with a filled out questionnaire, we will prepare a report setting out a predicted range of outcomes for the length of the notice period you are entitled to, along with a brief written explanation. During the notice period, you are entitled to be put into the same position you would have been in had you not been terminated. What that means is in addition to base wages, you may be entitled to bonuses, commissions, cell or vehicle allowances, and out-of-pocket expenses incurred due to being removed from health benefits, etc. When calculating your entitlement to severance or assessing an offer from your employer, it is important to remember these additional amounts. It is also important to keep in mind that your damages are supposed to account for your income while looking for a new position during “reasonable notice” period; if you are confident that you will find comparable employment during the notice period (or indeed do), your damages would typically be reduced by the income earned.

Fee: $200 plus tax

Timeline: within 2 business days

Next steps: if after receiving your report, you would like to proceed with a Consultation Package or Demand Package you will receive a $100 discount for these services.

**Please note this option is not recommended if a personal characteristic protected by the Human Rights Code may be a factor in the termination (things like mental or physical disability, family status, race, sexual orientation, religious beliefs, etc.) or there is a written employment contract as it is important to get advice on how these factors may impact notice entitlement.

2. Consultation Package

What’s included: everything in the Notice Assessment Report plus we will review your termination letter or package, any written offer of employment or employment contract (if applicable), and termination provisions if in an employee handbook and a consultation of up to 30 minutes with one of our employment lawyers.

Fee: $500 plus tax

Timeline: generally within 10 business days, however it is subject to lawyer availability particularly for more complex or senior employment roles.

Next steps: if after your consultation you would like us to proceed with opening a file and sending a demand letter, we will request a retainer of at least $2,000 and will proceed hourly. More information on hourly billing can be found on our website here: Hourly Rates and Litigation: how much is this going to cost me? If you would like us to ghost write a demand letter (i.e. prepare it in your name and you send it out) then we are also happy to do so for a fee of $750 plus tax.

3. Demand Package

What’s included: everything in the Notice Assessment Report and the Consultation Package plus we will write a demand letter and provide up to one hour of additional lawyer time, whether that is answering your questions via email, phone or negotiating with the employer.

Fee: $1250 plus tax

Timeline: generally the consultation can be completed within 10 business days and the demand letter can be completed within 10 business days of the consultation.

Next steps: if we are proceeding with negotiations in excess of what is provided for in this package or filing a claim in court or through the Employment Standards Branch or BC Human Rights Tribunal, we will request a retainer of at least $2,000 and will proceed with hourly billing. More information on hourly billing can be found on our website here: Hourly Rates and Litigation: how much is this going to cost me?

What do I do if I have a pending deadline for accepting the severance package?

You should have a reasonable opportunity to get legal advice on a severance package. Typically, if you let your employer know that you need more time to consider the offer or to seek legal advice they will provide an extension. Every now and then there is an unreasonable employer and we will accommodate urgent timelines where possible, however there may be a rush fee if we need to delay other matters.

Often the severance package is conditional upon signing a release where you give up the ability to bring any claims against your employer. It is important that you not sign any documents ahead of receiving advice.

You will also want to be careful about cashing any cheques. If the cheque is limited to accrued vacation pay and your statutory entitlement to notice under section 63 or 64 of the Employment Standards Act (explained in the Notice Assessment Report) this should not hurt your claim to additional damages but to be safe you may want to hold onto the cheque(s) until after you have received legal advice.

Can I open my file on contingency?

It is typically in your best interest to pay hourly rather than contingency. We will explain why.

Opening a file on “contingency” basically means that the client and law firm have agreed that as compensation for the work completed on a matter, the law firm will receive a percentage of the award obtained for the client when the matter settles or a judgment is rendered. Generally, this means that regardless of the amount of time spent on a matter the legal fees are approximately the same (typically there is a slight increase in the percentage received by the law firm if the matter settles just before trial or goes to trial).

It is rare for wrongful dismissal matters to end up in a trial unless the employer is asserting they had just cause to terminate. That said, in many cases it is not in the best interest of the employee to enter into a contingency agreement as the firm receives an amount far exceeding what the charge would have been for hourly representation. We see these invoices regularly when we represent the employer as often settlements are structured such that a portion of the funds going to the employee are paid as legal fees. In many situations, the law firm receives thousands of dollars for minimal time and as a general principle we do not think this is fair.

We also know that this can present an access to justice issue. Some individuals may not be able to afford to pursue their legal rights without a contingency arrangement. We will consider proceeding on this basis in limited circumstances, but we feel it is important to be transparent about how it works so you can make the decision that is right for you. If you would like to explore this option, you would first proceed with our Consultation Package.

More information about contingency fee agreements can be found here: Contingency Fees and Litigation: how much is this going to cost me?

How Do I Proceed?

Please reach out to our Litigation Intake Team at 778.666.3723 or First we will need to confirm who the parties are and that we are able to represent you. Then we will ensure you are set up with the right team members within our Employment & Human Rights Law Group depending on which option you would like to proceed with.

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