Even though the unemployment rate in Canada is down, some industries are still struggling and companies across the country are letting employees go. While severance packages can be very beneficial, they are not always worth as much as one would hope.
If you find yourself with a disappointing severance package, you are probably wondering whether you should try and negotiate for something better.
Here are some factors to consider:
1. Deadlines Are a Big Concern
How much time do you need to review the offer? The standard is 7 to 10 days, but that might not be enough depending on your circumstances. A short deadline creates pressure for individuals who are unsure if trying to get a better deal will be worth the effort.
If you don’t feel that the timeframe is reasonable, or the company is giving you a shorter timeline than what is standard, request an extension in writing. Be sure to explain that the reason you need more time is so you can obtain proper advice.
2. Carefully Review the Package
How exactly the pay will be distributed to you should be something you are clear on. Will the money be paid to you as one lump sum or in multiple payments over a period of time? If you will be receiving payments, for how many months will it be? Three? Six? Twelve? You should also find out if the pay includes any unused paid time off.
A proper severance package should include everything you would have received had you remained employed for that equal amount of time. If any benefit cannot be continued, you should at least receive a substitute of equal value. Have a legal expert help you go over everything.
3. Don’t Allow the Company to Trick You or Cut Any Corners
For example, your employer might describe your offer as being good for “one year,” but when you actually take the time to look at the package with your attorney, you might find that it consists only of your base salary. Depending on your line of work, commissions, on-call pay, discretionary bonuses, etc., should be included.
If it appears that the company is trying to cut corners, use this deception against them during negotiations.
4. Retention of Equipment and Supplies Might Be Worth Negotiating For
If you have been given any equipment, such as cell phones, computers, printers, etc., during your time as an employee, you might want to ask if you can keep it or at least purchase it at a significantly reduced price.
5. Know Which Phrases Will Be to Your Advantage to Use
The language should be both productive and friendly. Suggestions may be presented at any point during the negotiation process. For example, you can use the phrase “I propose…” or “I would like to suggest a solution.” Other important words to use include “flexibility,” “acceptable,” “clarify,” and “comfortable.” Try to state everything positively rather than negatively.
6. Carefully Review Your Work History with Your Attorney
Your own performance will play a role in how successful you are with the negotiations. If you are being let go because your employer feels you failed to measure up, your severance pay likely won’t be high—unless the company hasn’t documented your performance very well and can’t prove that you under performed.
If you are being fired due to something out of the company’s hands, such as downsizing, the terms will probably be more generous. Make sure you carefully review your work history with your employment lawyer beforehand.
7. Offer Something Yourself
Sometimes, negotiations are most successful when both sides have something to offer. For example, you could offer to do some outside consulting work or freelance work for the company in exchange for the best severance package available. Put everything in writing and keep your end of the bargain.
Never, ever sign anything until the negotiations lead to a result that you and your attorney are willing to accept.