Many employees are deterred from requesting additional compensation from employers upon termination. This is largely because employees assume that they can only secure damages after a drawn-out period of expensive litigation.
Below we discuss how negotiation in advance of litigation can be used to provide employees with a time-sensitive and cost-effective means of securing added compensation from their employers in the event of wrongful dismissal.
Am I Entitled to More Compensation?
Employees in Ontario are entitled to reasonable notice, or pay in lieu of notice, of the termination of their employment unless that right has been limited via an enforceable employment contract.
There is no absolute “rule” to determine how much reasonable notice an employee is entitled to at common law as this is determined through a review of the circumstances of each employee’s case, including considering factors such as the employee’s age, years of service, and the nature of the position the employee held. However, at common law, employees can be entitled to between 1-2 months’ of pay for each year of service that they complete with an employer.
It is advisable for employees to have their termination package reviewed by competent counsel. This is because counsel can undertake a comprehensive review of the package, including the termination language in their employment contract, to determine whether the package offered accurately reflects the employee’s entitlements at law.
Specifically, even if an employee has signed an employment contract that addresses termination, an employment contract can be challenged, and the employee may be able to access greater common law reasonable notice entitlements. These added compensation amounts can often be significant, particularly for long-serving employees.
Do I Need to Sue?
If it is determined that your entitlements upon the termination of your employment are greater than what your employer has provided you, then you may decide to pursue your employer for further compensation.
While employees can consider proceeding directly to litigation to pursue the matter, it is in the best interests of the employee to at least attempt to negotiate a settlement package with their employer prior to taking this step.
Some reasons to pursue a settlement through negotiation include:
- To avoid the time it takes to pursue a matter via litigation; and
- To avoid relevant litigation costs, including payment of legal fees leading up to and during the litigation process.
If you are thinking of suing your employer, you should first seek the advice of counsel to determine whether there may be an opportunity to settle your matter and avoid the litigation process.
How Do I Settle?
The process of negotiating a settlement with your employer involves crafting direct and legally relevant correspondence to your employer that sets out the legal case for your requests for additional compensation.
Employers will usually respond to such correspondence, with or without their own counsel, and may propose an alternative compensation package, such as a package that is more generous than the one initially presented to the employee. An employee can then assess the revised package and determine (ideally with the assistance of counsel) whether to accept the package, reject the package or propose further adjustments.
Ideally, the employer and employee will eventually come to an agreement as to the contents of the termination package and oftentimes an employee will be asked to execute Minutes of Settlement and a Release. It is important to have these documents reviewed by counsel to ensure that the compensation being received by the employee is in line with their entitlements and is adequate given what the employee is foregoing via the Release.
If you have been terminated from your employment and have questions about your rights and entitlements, we strongly recommend reaching out to us to discuss your options. Please contact Toronto employment lawyers, Sultan Lawyers, at 416-214-5111 or here.
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