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It is not uncommon for an employer, when terminating an employee, to offer to the employee a severance package in exchange for a signed release.

The purpose of the release is to provide assurances to an employer that they will not be sued in the future with respect to any matters relating to the employee’s employment, whether it be related to their hiring, employment, or termination.  

Do I Have to Abide By the Deadline on the Offer?

Employees who are faced with this situation often ask whether they are legally bound to the employer’s deadline to sign the release and, by extension, whether a failure to sign the contract before the deadline would cost them their severance package.

The answer is that an employee should not feel pressured to accept an offer by the date provided by the employer. While an employer can revoke an offer provided to an employee, most often the employer will be interested in reaching an amicable resolution. 

For this reason, we often recommend that an employee, when considering a package, request their employer to extend the deadline. The purpose of such a recommendation is to signal to the employer that the employee, while taking time to review their rights, remains interested in resolving all matters.

That said, if you do not sign a severance package before the deadline, this does not mean that your legal rights have been extinguished. In most cases, your employer will still have legal obligations that they must satisfy. Specifically, employers are still required to adhere to the minimum standards under the Employment Standards Act and, in most cases, to significantly more than this amount. 

Moreover, unless an employee signs a release, in most cases, they have 2 years to file a wrongful dismissal complaint and 1 year to bring a human rights application. 

Even if you have an employment contract that has a termination clause, you may still be entitled to a larger severance package because the contract may not be enforceable, or because there are other relevant factors such as discrimination or harassment based on human rights. 

Be Aware of Your Rights

As an employee, you have the right to ask your employer for more time to review the severance package. In fact, judges have been willing to overturn signed releases where they feel the release is unjust. In Rubin v. Home Depot Canada Inc., a decision of the Ontario Superior Court, the court refused to enforce a release because it felt that the employee did not have enough time to review the document and the related severance offer. 

The case is a reminder that employees should not feel unduly pressured to accept a severance offer and would be wise to review their options before deciding how to proceed.   

An employment lawyer can assist you in determining how to respond to an employer’s offer at the time of termination. They can also help to determine whether to request improvements to the offer and/or whether to proceed with a claim for wrongful dismissal. 

For information regarding wrongful dismissal or unjust dismissal, or if you have any questions about whether you should be pursuing a claim against an employer, you may contact an experienced Toronto employment lawyer at Sultan Lawyers. Please contact Majella Lahert by telephone at 416-214-5111 or by email at mlahert@sultanlawyers.com.


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