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clients across Canada since 1987

Mar 01, 2017

Fired Executives - Are you entitled to severance, termination notice or both?

When it comes to employment termination, the words "notice" and "severance" are often thrown together interchangeably. Yet, they're not the same thing. Even executives and senior-level employees are not always sure whether the exit package their employers offer is a fair one.

Were you recently let go or suspect you soon will be? Is it without cause? If so, you may be entitled to both termination notice and severance pay - but only under certain circumstances.

Termination notice - Every employee's right

Every province in Canada has its own employment standards legislation. All of these require employers to provide workers with due notice of a dismissal. Termination notice is a legal requirement. The only exception is in "just cause" dismissals in which an employee's actions are so serious that they have effectively breached the terms of the employment contract.

Your employer can choose to provide notice by informing you in advance and allowing you to continue working through to your last day. Alternatively, your boss may be let you go immediately, but must provide equivalent pay and benefits for the total length of the notice period.

Severance pay - Not all employees are eligible

Severance is a whole other matter. It's a provision designed to compensate qualified employees. These have invested heavily in their employer's business over a long period, and by being "severed", suffer losses tied to their seniority.

Qualification depends on a number of factors, including:


  • Length of employment
  • The employer's total annual payroll
  • Whether the termination was due to the employer's bankruptcy, insolvency or complete discontinuation of the business
  • Whether the case involved a constructive dismissal
  • Whether there were lengthy layoffs involving a number of employees over a specific period

Statutory minimums are only the tip of the iceberg

Employment standards set out formulas to calculate the bare minimums employers must provide in notice and severance. In reality, these often represent only a fraction of the compensation employees could actually pursue in court, based on similar cases. This is especially so for high-income and senior-level employees.

Do you know if your termination package is fair? An experienced employment lawyer can crunch the numbers for you, conduct the legal research and build a case against your employer.