Severance Offers

Severance Offers

A case was recently released by the Ontario Court which provides an important message for an employee when presented with a severance offer by a company.

Severance OfferIn this case, the employee relied on the advice of the Human Resources individual in the company that was severing him that the company was offering “a good deal”. Accordingly, because he had faced considerable legal expenses through a divorce, he signed the release without first consulting a lawyer. When he later discovered that he could have obtained a much better package, he sued the company, claiming the agreement he signed was substantially one-sided and should be set aside.

The Court disagreed with the plaintiff, stating that he could have refused Human Resources’ advice and obtained legal representation, which would have confirmed that the available severance the Court may have awarded was considerably higher than that offered. While the Court recognized that the severance was less than what he could have received and was “unfortunate”, the Court relied upon the plaintiff’s signature on the release and dismissed his case.


The Message is clear

  • • A preliminary severance package is usually negotiable. It is important therefore to seek legal advice before signing your name on any release
  • • If your company has given you a limited time in which to seek legal advice, ask for more time or the opportunity to consult with a lawyer, or if the terms of the offer or release are unclear
  • • It is not easy to prove that your signature on a document has been coerced or that you have signed a document under duress or difficult circumstances.


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