Assessing a Severance Offer in Vancouver

When reviewing a severance offer in Vancouver, the first step is to examine the employment contract carefully. Employment law is fundamentally rooted in contract law, so we begin by determining what the contract provides in terms of severance. Understanding this foundation is essential for both employers and employees engaged in severance negotiations, as it forms the basis for determining what an employee is entitled to receive.

Employment Standards Act (ESA)

Next, we consider the Employment Standards Act (ESA), which sets out minimum notice requirements or severance pay. These statutory minimums form the baseline for what an employee is legally entitled to receive upon termination. To limit an employee’s entitlement to only the ESA minimums, the employment contract must contain a clear written clause stating that, in the event of a without-cause termination, the employee is entitled only to the ESA minimum notice.

If either of the following applies:

• There is no written employment contract; or
• The contract does not contain a clause limiting severance to ESA minimums

Then the employee is likely entitled to common law severance pay or pay in lieu of notice. This distinction is crucial and often makes a significant difference in the final compensation an employee receives. Many employers and employees are not fully aware of how statutory minimums compare to what may be owed under common law principles.

Common Law Severance

Common law severance is determined based on several factors, including:

• Age of the employee
• Length of service
• Availability of similar employment

This list is not exhaustive; courts consider many other factors to determine what constitutes a fair and reasonable severance package. Common law protections often provide employees with greater protection than statutory minimums alone. Employees should also be aware that “severance” can be provided as working notice, which may affect how package reviews should be evaluated and what the true monetary value of an offer represents.

Employees should also be aware that “severance” can be provided as working notice.

Consultation Process

During a consultation with our office, we will conduct a thorough review of your severance offer in Vancouver or elsewhere in British Columbia. We will:

• Review the employment contract in detail
• Determine whether it contains a termination clause
• Assess whether that clause is enforceable
• Evaluate the notice of termination provided to you

Often, employment contracts are not enforceable, and in such cases, the employee may be entitled to common law severance. This is why seeking legal advice early in the process is so important. An experienced employment lawyer can identify enforceability issues that might otherwise be overlooked and ensure your interests are fully protected.

Estimating Notice Period

There is no fixed rule for calculating common law notice, but a rough estimate is typically at least one month per year of service. Other factors affecting the length of notice may include:

• Whether the employee was induced or recruited to accept the job, and
• The conduct of the employer during termination

When employers and employees are negotiating severance terms, these principles provide a framework for what constitutes fair compensation. Understanding how courts calculate reasonable notice can empower employees to evaluate whether a severance offer in Vancouver or your jurisdiction is truly adequate and reflects your true entitlements.

Legal Consultation

It is crucial to seek legal advice from one of our Vancouver or Langley employment lawyers to discuss all relevant factors affecting your severance entitlement. Even seemingly minor details can significantly impact the severance entitlement. Our lawyers will:

• Review the facts surrounding the termination
• Assess the conduct surrounding termination
• Explore additional claims, such as:
  • Human rights complaints
  • WorkSafe BC complaints
  • Potential wrongful dismissal claim evaluation
  • Other legal avenues

An experienced employment lawyer will provide the legal support necessary to ensure you understand your full range of options and entitlements. We are committed to helping you navigate this complex process.

Employment Insurance and Jurisdiction

A severance offer may also affect Employment Insurance (EI) eligibility. If EI is collected, the timing and amount of severance can impact EI benefits. Additionally, it’s important to determine whether the employee is federally or provincially regulated. If the employment involves interprovincial or international trade, it is likely federally regulated, meaning federal legislation applies instead of the BC Employment Standards Act.

Ensuring the claim is pursued in the correct jurisdiction is essential for accurately assessing and recovering damages. This is another area where legal support becomes invaluable, as jurisdictional complexity can significantly affect your case outcomes and the compensation you ultimately receive.

Multiple Avenues of Recourse

Employers and employees should both understand that employees may have multiple avenues of recourse available to them. For example, they may have:

• A wage loss claim under the ESA
• A severance claim under common law
• Potential damages related to a wrongful dismissal claim

Note: Wage complaints typically must be filed with the Employment Standards Branch, while common law severance claims must be pursued through the courts of British Columbia. Understanding which forum applies to your situation is critical for pursuing your claim successfully.

Mitigation and Assessing a Severance Offer in Vancouver

When one of our employment lawyers in Vancouver or Langley is assessing a severance offer made to you by an employer upon termination, all of the previously discussed factors will influence whether the offer is reasonable. Package reviews conducted by an experienced employment lawyer take into account both the immediate monetary value and the longer-term implications for your employment situation and career prospects.

Our employment lawyers will also guide you through the principle of mitigation. Mitigation applies to employees after termination. The courts aim to provide reasonable notice, which refers to the amount of time a judge believes it will reasonably take an employee to find alternative employment.

After termination, an employee is expected to begin looking for new work. However, this may not need to happen immediately. Courts recognize that employees may need time to recover from the loss of their jobs. But at a reasonable point following termination, the employee must begin seeking alternative employment.

If the employee finds a new job that pays the same or more than their previous position, they are considered to have mitigated their damages—meaning they have not suffered wage loss during that period. Conversely, if an employee does not look for work at all and simply attempts to collect severance pay, the court may find that the employee has failed to mitigate their loss. In such cases, the court may reduce the amount of reasonable notice or severance pay accordingly.

Can you get Severance on Commissions?

Leena Yousefi explains why commissions should be included in your severance package in the video below.

Making an Informed Decision

When evaluating a severance offer, it is important for the employee to consider how quickly they may be able to find new employment. In a poor job market, it may take longer to secure a new position, which could justify pushing for a larger or longer severance package. Conversely, if the employee works in a field where jobs are readily available, they may wish to consider accepting a shorter notice period.

There are many factors to weigh, and our Vancouver and Langley employment lawyers can help simplify the process through comprehensive legal support and detailed package reviews. We aim to provide employees with clarity, comfort, and confidence, ensuring they understand their rights and are receiving what they are entitled to. If you need to seek legal advice regarding a severance offer in Vancouver or have questions about a potential wrongful dismissal claim, do not hesitate to contact our office for a consultation today.

Contact YLaw today for a consultation.