So, you have a termination package in your hand. There is a line for you to sign before the law will consider it binding. Never sign anything on the spot!
The first thing you should do is to determine how long Megacorp’s offer is good for so you can take appropriate action before the expiration date, which just might mean asking for an extension.
The second thing you should do is review the terms of the severance offer for reasonableness. Then I would recommend you should retain legal counsel to review the offer and then help you negotiate a better offer if so advised or, if all else fails, then to litigate.
Lawyers speak of a “notice period” terminated employees are entitled to. This is essentially a common law term which has evolved from a series of court decisions. It measures the time a court would think it would take you to find alternative employment.
This depends how senior you are, your age and skill set, amongst other things. For example, a senior employee with a high executive functioning ability who is close to 65 ordinarily would face a lengthier job search than a 35 year-old with less seniority.
The common law ordinarily gives a month’s notice per year of service. If you are entitled to a notice period of nine months you will receive 9 months of salary. The employer can also give you working notice where you continue to be employed during the notice period. This extremely rare as once you are fired you are no longer trusted so best to clear you out.
There is a ritual to termination offers given by Megacorp.
Megacorp’s counsel knows exactly what you are entitled to under both statutory and common law, but in most cases they’ll low ball you. Then your counsel will up the ante to more than you would be legally entitled to and they’ll settle somewhere in the middle of the difference knowing full well most people will not litigate to recover their full legal entitlement.
Litigation is very expensive and Megacorp knows this so you’ll almost always be low-balled.
Now, where things may be a bit less creative is if you had signed an employment contract with Megacorp where you have agreed to a notice period. However, even then there still may be benefits and bonus issues that need to be negotiated.
Your employment contract may not be as tight as Megacorp thought it was.
Depending on what province you reside in, instead of an hourly fee payable to your lawyer you may be able to proceed by a contingency fee where there are no hourly legal fees but your lawyer gets a cut of any additional amount your lawyer obtains for you which exceeds Megacorp’s original severance offer.
I don’t wish to bog you down with too many legal details, but here are some key points you should be aware of concerning a termination offer by Megacorp.
You may have signed one when you accepted Megacorp’s offer of employment. It may set forth fully or partially what you are entitled to upon termination. Simply because you agreed to it does not necessarily close the book on what your notice period is and your entitlement to other employment benefits.
Often clauses in the employment contract can be ambiguous and poorly drafted. They may be worth a legal challenge.
Both statutory law and the common law offer differing notice periods. Statutory law offers usually a less substantial period than common law but common law can always come into play.
The common law provides about a month per year of employment capping around two year’s notice. The higher the seniority of the victim, the years of service of the victim, the age of the victim, and skill set of the victim are taken into consideration in establishing the common law notice period.
If you were fired in an oppressive and embarrassing manner the court may offer you what is called punitive damages punishing Megacorp for treating you in a harsh and oppressive way.
Beware of the Americans
American law is far more parsimonious than Canadian law when it deals with notice periods which is, generally speaking, a week for each year of employment. If you are in a Canadian Megacorp, which is a subsidiary of an American Megacorp, don’t settle for the American standard.
Pay Attention to Benefits
Pay close attention to all benefits like dental and health insurance, bonus payments, life insurance, professional fees, pension plan contributions, and employment benefit plan contributions. These benefits should continue to be payable during the notice period.
Termination for Cause
The law offers virtually no protection if you were terminated “for cause” which means amongst other things, fraud, theft, incompetence, misappropriation of confidential information, or trashing Megacorp on social media!
Again, consult a lawyer on this point as cause can be manufactured and it is often difficult for Megacorp to show cause!
Your Duty to Mitigate
The common law provides you have a duty to mitigate your losses, which means if you are on salary continuance during your notice period you must expend some effort to find alternative employment. How rigorous this may be in many respects depends on your age and skills.
If you are 63 years old I highly doubt Megacorp will relentlessly pursue and monitor your efforts to find new employment, but be a good boy or girl and attend those outplacement sessions.
It depends on Megacorp’s attitude. Keep a journal of your outplacement activities, networking activities, and job interviews as you may be asked by the Human Resources Department to provide updates to prove you have been mitigating your losses.
If they think you haven’t been trying hard enough they may turn off the taps.
Your severance offer will turn off the taps either completely or pay you a certain incentive amount if you find employment during the notice period. If you feel like you have been fucked over by Megacorp there is the thought that may cross your mind not to tell them you have been hired thus enabling a double salary.
Do so at your own risk as there will be a clause in your severance offer requiring you to notify Megacorp if you have found employment. Beware that Megacorp will be more than willing to hire a private detective.
CRAP had me tailed twice. I am sure they would have clapped their hands in glee if they had found out I was going off to work without advising them I had found new employment.
Indemnification and Release Agreements
Once you settle there will be a possible indemnification and release agreement to be signed between Megacorp and you. Pay attention to any restrictive covenants prohibiting you from accepting offers of employment from Megacorp’s competitors for a certain period of time and in a certain geographic area.
As you may have a very specific skill set this may be deadly to you. These types of agreements really do require an employment lawyer review.
OK. Now you have had your initial employment lawyer consultation. You can accept the offer. You can negotiate the offer on your own with your lawyer’s advice. You can have the offer negotiated between your lawyer and Megacorp’s lawyer.
Eventually you may decide to litigate, which is very expensive. It rather is a matter of dollar based math on what to do.
I should mention the concept of “constructive dismissal.”
This is the situation where Megacorp, in effect, demotes you in a variety of ways such as reducing the amount of your direct reports, reducing benefits or salary, taking away your office, or other actions that would humiliate a reasonable person.
In this case, you can pull the employment relationship plug and seek damages. But, before pulling the plug, consult with an employment lawyer.
Let me emphasize that many of you dislike or are suspicious of lawyers. But, when you have a termination offer in front of you I urge you to consult with a lawyer who specializes in employment law.