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Posts tagged: Departing Employees

How Important Are The Deadlines In Your Severance Package?

By , December 6, 2018 1:43 pm

You are terminated from your job and your employer offers you a severance package. They give you one week to sign the offer and ask that you sign a full and final release confirming that there will be no further payments. Are you obligated to sign and return the offer within a week?

We often receive this question from recently terminated employees who are scrambling to find legal advice within a few days while also dealing with the stress of their termination.

If we are first contacted close to the deadline we often advise employees to simply request an extension from their employer. In our experience, the vast majority of employers will consent to this request. It is important to remember that it is in your employer’s best interest to reach a reasonable deal with you.  Just because you do not sign and accept their severance package before the deadline, does not make their legal obligations to you disappear. Further, the deadline is only important if you are accepting the offer.

You should have your severance package reviewed by a lawyer before accepting it because, in many cases, it is possible to negotiate a better severance package. It is not unusual for employers to offer severance packages that barely meet the minimum standards set out in the Employment Standards Act. You may be entitled to considerably more pay than the minimum standard.  Even if have signed an employment contract with a legally enforceable termination clause, it is possible that you could be entitled to a large severance package because of conduct that occurred during your employment such as harassment and discrimination. Unless you are certain that their severance package is fair you should not sign a severance offer and release until you have consulted with a lawyer.

At least one Ontario judge has unfavourably viewed stringent deadlines requiring an employee to sign a severance package and release.  In Rubin v. Home Depot Canada Inc., 2012 ONSC 3053 the Court found that even though an employee had signed a “release” shortly after his termination, the release was not binding. The Court found that the employee had not been given sufficient time to consider the offer.  Ultimately the Court awarded him significantly more notice than his employer had offered him.

Lessons for Employees:

  1. If you need more time to obtain legal advice ask your employer for an extension to sign the severance package, particularly if you are given less than 5 business days to consider the settlement offer.
  2. Always consider having your severance package reviewed by a lawyer because it is possible you could be entitled to a greater notice period. Especially if you are a long service employee. Remember: you don’t know what you don’t know.

If you would like to speak to an employment lawyer at the MacLeod Law Firm, you can reach us at [email protected] or 647-204-8107.

The material and information in this blog and this website are for general information only. They should not be relied on as legal advice or opinion. The authors make no claims, promises, or guarantees about the accuracy, completeness, or adequacy of any information referred to in this blog or its links. No person should act or refrain from acting in reliance on any information found on this website or blog. Readers should obtain appropriate professional advice from a lawyer duly licensed in the relevant jurisdiction. These materials do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.

How much notice of resignation should I give my employer?

By , June 15, 2016 12:01 pm

Did you know that an employee is required to provide “reasonable” notice of resignation (unless you agree to a different notice period in an employment contract)? If you fail to do so, your former employer can sue you and a judge can order you to pay the employer damages. A recent Ontario Superior Court case examines the question of what reasonable notice of resignation is.

Facts

Mr. Jesso was a senior salesman at Gagnon & Associates Inc. The employment relationship was not “one of harmony.” Mr. Jesso believed he was underpaid, while Gagnon felt they were paying him too much. Mr. Jesso became so dissatisfied he began making plans to work at HTS, a competitor of Gagnon’s.

One Friday afternoon, Mr. Jesso and another employee provided their letters of resignation, effective immediately. Mr. Jesso offered to work another two weeks, provided that Gagnon paid outstanding fees Mr. Jesso believed he was entitled to. Gagnon did not accept Mr. Jesso’s offer to work a further two weeks.

Gagnon sued Mr. Jesso for breach of his duty of good faith, misusing confidential information, and failing to give adequate notice of resignation. Mr. Jesso counterclaimed for the outstanding fees he believed he was owed, a share of the business and for constructive dismissal. Ultimately, Mr. Jesso was successful on his claim for outstanding fees, and Gagnon was successful in arguing Mr. Jesso failed to give sufficient notice of resignation.

What is sufficient notice of resignation?

In determining the amount of notice Mr. Jesso should have given, the court considered the nature of his position and the time it would reasonably take Gagnon to replace him. Although Mr. Jesso had no managerial responsibilities, he was a senior employee with 10 years’ service and was responsible for a significant portion of Gagnon’s sales. The court accepted that Mr. Jesso’s departure resulted in Gagnon’s sales not increasing by a predicted 20% margin. Another relevant factor was that Mr. Jeso knew the other employee intended to resign the same day, which would also negatively impact Gagnon.

The court found that Mr. Jesso should have given two months’ resignation and ordered him to pay Gagnon the loss of sales that were properly attributed to Mr. Jesso that Gagnon suffered during those two months.

Lessons to be learned

The amount of notice employees are required to provide depends on multiple factors, including the nature of the position and their length of service. If you are considering to leave your employment, you should consult a lawyer to learn what your obligations to your employer are both during and after your resignation. This is especially the case if you are considering working for a competitor.

If you have any questions about your legal rights and obligations in the workplace, one of our lawyers would be happy to meet with you. Please call 647-204-8107 or email [email protected].

“The material and information provided on this blog and this website are for general information only and should not, in any respect, be relied on as legal advice or opinion. The authors make no claims, promises or guarantees about the accuracy, completeness, or adequacy of any information linked or referred to or contained herein. No person should act or refrain from acting in reliance on any information found on this website or blog, without first retaining counsel and obtaining appropriate professional advice from a lawyer duly licensed to practice law in the relevant jurisdiction. These materials do not constitute legal advice and do not create a lawyer-client relationship between you and any of the authors or the MacLeod Law Firm.”

 

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