3 Severance Mistakes That Can Cost Ontario Employees Thousands 

When employment ends, many employees make the same mistake: they treat the severance package as a routine payroll document instead of what it usually is — a legal agreement. 

That is costly. A severance package often requires the employee to sign a release in exchange for money. Once that release is signed, it may be difficult or impossible to pursue additional compensation later. In Ontario, the question is not simply whether the employer offered something. The question is whether the offer is enough.  

Here are three common mistakes that can materially reduce what an employee receives. 

Mistake 1: Signing quickly because the employer says the deadline is firm 

Many employers present severance offers with short deadlines. That does not, by itself, mean the offer is fair. 

A short deadline often serves the employer’s interest in obtaining certainty before the employee has had time to assess the package properly. Employees who sign immediately may give up the right to challenge the adequacy of the offer, including whether it reflects only ESA minimums or a broader resolution of common-law claims.  

The practical rule is simple: do not sign in the first wave of pressure. 

Mistake 2: Assuming the offer is fair because it appears to meet minimum standards 

This is one of the most common misunderstandings in Ontario termination cases. 

The ESA sets minimum standards. It does not automatically define the full value of every termination package. Ontario’s own guidance makes clear that termination pay and severance pay are separate statutory concepts. Some employees may also have greater rights outside the ESA.  

That distinction matters. An offer can satisfy minimum statutory obligations and still be materially lower than what an employee would accept in full settlement of a wrongful dismissal claim. 

This is often more important for long-service employees, older workers, managers, executives and employees whose re-employment prospects may be more limited. 

Mistake 3: Looking only at salary and ignoring the rest of compensation 

Many employees focus on the salary number first. That is understandable, but incomplete. 

Depending on the role, a proper severance assessment may also need to account for bonus, commissions, benefits, pension contributions, car allowance, equity, deferred compensation, or other recurring compensation. A package that looks acceptable on base pay alone may still understate the employee’s real loss.  

This becomes more important as compensation becomes more layered. 

What Ontario employees should do before signing a severance package

Before signing a severance package, an employee should gather the termination letter, employment agreement, bonus or commission documents and recent compensation records. It is also important to identify whether the package contains a release and whether the employer is offering only minimum standards or something more. 

The most important practical step is to slow the process down long enough to understand what is actually being offered. 

How Lecker & Associates can help 

Lecker & Associates advises employees across Ontario on severance, termination packages, and wrongful dismissal claims. If you have received a severance offer, the first issue is not whether the employer says the package is standard. The first issue is whether signing it would end your right to pursue more.  

We can be reached at  416-223-5391 or intake@leckerslaw.com for a confidential consultation.