Losing your job is stressful. On top of the emotional toll, employees often face immediate financial worries and uncertainty about their next career step. Employers in Alberta are legally required to provide certain minimum payments when employment ends, but many severance packages fall short of what employees are truly entitled to under Canadian common law.
At Verhaeghe Law in Edmonton, our employment lawyers regularly review severance packages to ensure fairness. We help employees understand their rights, negotiate stronger settlements, and, if necessary, litigate unfair terminations. Before signing anything, it is crucial to know what a severance package should include. To discuss your situation with one of our lawyers, contact us today.
What is a Severance Package in Alberta?
A severance package is the compensation and benefits provided to an employee upon termination. It may be paid as a lump sum or over a notice period. Typical components include:
- Termination or notice pay: Compensation in lieu of the legal notice period.
- Payment for unused vacation days.
- Benefit continuation, such as health, dental, or pension coverage.
- Bonuses, commissions, or stock options earned but not yet paid.
- Additional lump-sum payments offered to encourage employees to waive legal claims.
- Career transition support, like resume services or job placement assistance.
It’s important to note that Alberta’s Employment Standards Code (ESC) sets out minimum entitlements—but courts often award more generous amounts under common law.
Minimums vs. Common Law Entitlements
The ESC requires employers to provide notice or pay in lieu, depending on length of service, up to a maximum of 8 weeks. For example, an employee with 6 years of service is entitled to at least 6 weeks of termination pay.
But under common law, employees are often entitled to much more. Courts consider factors such as:
- Age of the employee.
- Length of service.
- Position and level of responsibility.
- Availability of similar employment in the marketplace.
- And more
For example, a 50-year-old senior manager with 20 years at a company may be entitled to 18–24 months of pay under common law, far exceeding the ESC minimums.
What Should Employees Look For in a Severance Package?
When reviewing an offer, pay attention to:
- Notice period or pay in lieu: Does it align with your common law entitlements, not just ESC minimums?
- Benefit continuation: Are health and dental benefits extended throughout the notice period?
- Inclusion of bonuses, commissions, or stock options: Employers sometimes exclude these improperly.
- Payout of vacation: All unused vacation days may need to be paid in full.
- Restrictive covenants: Clauses like non-compete or non-solicit agreements may unfairly limit your future career options.
- Waiver of claims: Employers often require employees to waive their right to sue in exchange for severance—this must be carefully reviewed.
Common Problems with Severance Offers
Employees often encounter:
- Pressure to sign quickly: Employers may set short deadlines, creating unnecessary stress.
- Lowball offers: Packages often reflect only ESC minimums.
- Overly broad restrictions: Non-compete clauses may attempt to bar you from working in your field.
Failure to account for all compensation: Employers sometimes exclude commissions, overtime, or performance bonuses.
Once you sign, you typically cannot challenge the package later. That’s why legal advice before signing is critical.
How Verhaeghe Law Can Help Navigate Severance Packages
At Verhaeghe Law, our employment lawyers:
- Review severance packages to assess whether they reflect your true entitlements.
- Calculate common law notice periods using legal precedents and case law.
- Negotiate improved offers, potentially securing higher payouts, extended benefits, or reduced restrictions.
- Challenge unfair agreements in court if necessary.
- Advise on career restrictions, helping you avoid clauses that limit your next opportunities.
We level the playing field between employees and employers, ensuring you don’t leave money or benefits behind.
Tips for Employees Who Have Been Let Go
If you’ve been offered a severance package in Alberta:
- Do not sign right away. Take time to review and seek advice.
- Keep records of your employment history, contracts, and pay details.
- Calculate benefits carefully. Ensure health, pension, and vacation entitlements are included.
- Consult an employment lawyer before accepting or rejecting the package.
Book a Consultation With Our Edmonton Employment Lawyers
Severance packages can be complicated, and what seems fair on paper may not reflect your true entitlements. Employers have legal counsel protecting their interests—employees deserve the same.
If you’ve been offered a severance package, contact Verhaeghe Law’s Edmonton employment lawyers before signing. We will review your package, explain your rights, and fight for the compensation you deserve.