Many people are finding themselves in unfamiliar situations following termination of employment. They must find out how to negotiate a fair severance package, which is not always easy. There are many factors that contribute to how much someone might receive as part of their severance package, and there can be a lot of disparity between different severance packages.
One of the scariest things that can happen to someone is to lose their job. Suddenly, you’re without a source of income, and you may not know where to turn. One way that helps with this is taking the time to investigate your severance package, either with the help of employment lawyers or on your own.
Either way, you’re on the right track. Here are five ways to know if your severance package is fair in your situation.
1. Read Your Employment Contract Again
It can be difficult to know what you are going to get when you sign a contract. All of your hard work and the time and effort you’ve put into your job might go down the drain if you don’t read the details carefully. If your severance package is not fair to you, it’s important that you follow through with legal steps and fight for what is rightfully yours.
One of the first things you should do when looking over your severance package is to read it again, along with your latest employment contract. Make sure that all of the terms are clear and that you fully understand them, and ask your legal or human resources representative any questions you might have before signing anything.
You shouldn’t sign a contract unless you know exactly what you’re getting into and what your obligations will be.
2. Pinpoint the Reason for Your Dismissal
If you are terminated, it is important to get the reason why, and how much you are expected to receive in severance. For example, if your employer says there was a lack of performance, ask for detailed information and seek clarification on what was lacking in your performance.
This is crucial, as your employer’s reason for dismissal will determine whether they believe you are entitled to receive severance pay or not. Make sure to take note of any written or verbal reasoning given at the time of your dismissal, as this will help determine if you should receive severance compensation at all.
3. Examine Everything Used to Calculate Your Severance Package
It’s important to consider all components of your severance package and see if they are fair. Every company calculates severance differently, but it is generally calculated based on how long you’re expected to be out of work, and how long you’ve been with the company.
The federal government rates severance packages according to the amount of time you will be out of work. A longer period of time means that the government is expecting a lower rate since they are not as likely to have a high turnover rate. It’s also vital for Canadian employers to examine the basis for calculating severance packages in Canada.
If your employer already made you a severance offer, it’s possible that you’ve been terminated without reasonable cause, so it’s important to negotiate your severance package accordingly.
4. Speak to an Employment Lawyer
An important step toward getting a fair severance package is speaking to an employment lawyer. Whether you are leaving a job on your own accord or as part of a layoff, you should never proceed without discussing the terms of your departure with legal counsel. Employment lawyers can inform you of “clawbacks” that may apply and help you negotiate a fair severance package based on what they recommend.
5. Don’t Accept Your Severance Right Away
It may be tempting to sign as soon as you see your severance offer, but you may be entitled to further compensation.
The most important part of determining the fairness of your severance package is taking your time to thoroughly go through all of the points above before signing your severance agreement. Once it’s signed, you can’t go back.
While many people are afraid of being unemployed and worried about the severance package they receive in the process, employees should understand that their severance package may not be fair. There is no standard approach to how severances are decided or how much they are paid. You can use these five signs to see if your severance package is fair.