Being told that your employment has ended is often one of the most stressful moments in a person’s career. Many employees are shocked, emotional, and completely unprepared when they are called into a termination meeting.

Employers know this.

That is why many employers present employees with a severance agreement or release during the termination meeting and encourage them to sign it immediately or within a very short period of time.

Do not sign a release or severance agreement at your termination meeting.

In almost every case, there is no legal requirement that you sign anything on the spot. Taking time to understand your rights could make the difference between accepting a severance package worth only a few weeks of pay and recovering several months—or even significantly more.

This article explains why you should never feel pressured to sign immediately, what a release actually means, and the steps you should take after being terminated without cause.

What Is a Release or Severance Agreement?

A severance agreement is a legal contract between an employer and an employee that typically sets out:

• the amount of severance being offered;
• continuation of benefits;
• bonus, commissions, or incentive payments;
• confidentiality obligations;
• non-disparagement provisions; and
• a release, where the employee agrees not to sue the employer.

The most important part of the agreement is usually the release.

Once you sign it, you generally give up your right to pursue a wrongful dismissal claim, even if you later discover that you were entitled to substantially more compensation.

Simply put:

Signing the release usually ends your ability to negotiate or pursue additional severance.

 

Why Employers Want You to Sign Immediately

Many employees ask why employers seem to want an immediate signature.

The answer is simple.

Employers benefit from certainty.

If an employee signs during the termination meeting, the employer knows the matter is finished and avoids the risk that the employee will obtain legal advice and discover that the offer is inadequate.

This does not necessarily mean the employer is acting improperly. However, it does mean that you should approach the situation carefully.

Remember:

The termination meeting is often the worst possible time to make an important legal decision.

You Do Not Have to Sign at the Termination Meeting

One of the biggest misconceptions employees have is that they must sign the paperwork before leaving the meeting.

That simply is not true.

You can usually say something as simple as: “Thank you. I would like some time to review these documents before making any decisions.”

That response is professional, reasonable, and entirely appropriate.

Do not let statements such as these pressure you into signing immediately:

• “This offer expires today.”
• “Everyone signs this.”
• “There’s no need to speak with a lawyer.”
• “This is our standard agreement.”
• “You won’t receive payment unless you sign today.”

Although employers may impose deadlines for enhanced severance offers, employees are generally entitled to a reasonable opportunity to review the documents and obtain legal advice.

The Offer May Be Much Lower Than Your Legal Entitlement

One of the biggest mistakes employees make is assuming that the employer’s offer must be legally correct.

It often is not.

In Ontario, there is an important distinction between:

• minimum entitlements under the Employment Standards Act, 2000 (ESA); and
• common law reasonable notice.

The ESA establishes only the minimum standards that employers must provide.

Many employees are entitled to substantially greater compensation under the common law.

Depending on the circumstances, the difference can amount to tens of thousands—or even hundreds of thousands—of dollars.

Your Employment Contract Matters

Before determining whether your severance offer is reasonable, your employment contract should be reviewed.

Many employment agreements contain termination clauses that attempt to limit employees to the minimum standards under the ESA.

However, Ontario courts have repeatedly found many termination clauses to be unenforceable.

If a termination clause is unenforceable, an employee may instead be entitled to common law reasonable notice, which can be significantly greater than the amount initially offered.

This is one of the most important reasons to have your documents reviewed before signing anything.

Factors That Affect Your Severance Entitlement

Every case is different.

Several factors can affect the amount of severance you may be entitled to, including:

• your age;
• your length of service;
• your position within the company;
• your compensation;
• the availability of similar employment; and
• the wording of your employment contract.

Two employees earning the same salary may receive dramatically different severance entitlements because these factors differ.

That is why generic online advice or comparisons with coworkers are often misleading.

What If the Employer Gives You a Deadline?

Many severance packages contain deadlines.

While you should not ignore those deadlines, you also should not panic.

Instead:

• review the documents carefully;
• gather your employment records;
• contact an employment lawyer promptly; and
• avoid signing until you understand your rights.

In many cases, lawyers can contact the employer and request additional time if necessary.

What Should You Do After Being Terminated Without Cause?

If you have been terminated without cause, taking the right steps early can protect your legal rights.

1. Do Not Sign a Release or Severance Agreement

This is the most important step.

Do not sign anything before understanding:

• what you are giving up;
• whether the offer is fair; and
• whether you may be entitled to more.

2. Gather Your Employment Documents

Collect copies of:

• your employment contract or offer letter;
• the termination letter;
• recent pay statements;
• bonus information;
• commission records;
• benefit information; and
• pension or RRSP documentation, if applicable.

These documents are often critical when assessing your entitlements.

3. Record Important Information

Write down:

• your start date;
• your termination date;
• your age;
• your job title;
• your salary;
• bonuses and commissions;
• benefits; and
• any significant changes to your role over time.

Having accurate information available will help assess your potential severance entitlement.

4. Review Your Employment Contract

Your employment agreement can significantly affect your rights.

A lawyer can determine:

• whether the contract is enforceable;
• whether the termination clause complies with Ontario law; and
• whether you may instead be entitled to common law reasonable notice.

5. Estimate Your Severance

Online severance calculators can provide a general estimate.

However, they cannot replace legal advice.

Many important issues—including bonus entitlements, enforceability of termination clauses, inducement, and mitigation—cannot be accurately assessed by a calculator alone.

6. Apply for Employment Insurance

If you qualify, apply for Employment Insurance (EI) promptly.

Although severance payments may affect when EI benefits begin, delaying your application unnecessarily can create additional complications.

7. Obtain Legal Advice Before Any Deadline

Wrongful dismissal claims are subject to limitation periods.

Waiting too long may affect your ability to pursue your legal rights.

Even a brief consultation can help you understand whether the employer’s offer is reasonable.

Common Mistakes Employees Make

Employees frequently make avoidable mistakes immediately after losing their jobs.

Some of the most common include:

• signing the release during the termination meeting;
• assuming the employer’s offer is legally correct;
• relying on advice from coworkers instead of legal advice;
• failing to preserve employment documents;
• missing important deadlines; and
• waiting months before seeking legal advice.

Avoiding these mistakes can significantly improve your position.

Frequently Asked Questions

Can I change my mind after signing a release?

Usually not.

Once you sign a valid release, it is often very difficult to pursue additional severance.

What if the employer says I have only 24 or 48 hours?

Do not assume the deadline is absolute.

Contact an employment lawyer immediately.

In many cases, additional time can be requested.

Should I negotiate on my own?

Sometimes employees successfully negotiate improvements themselves.

However, before making concessions or signing revised documents, it is wise to understand the value of your legal claim.

What if I have already signed?

You should still obtain legal advice as soon as possible.

Although signed releases are often enforceable, there are limited situations where they may be challenged depending on the circumstances.

Protect Your Rights Before You Sign

Being terminated without cause is stressful, but the decisions you make during the first few days can have a lasting financial impact.

Remember these key steps:

• Do not sign a release or severance agreement at the termination meeting.
• Gather your employment contract, termination letter, and compensation records.
• Review your employment contract and termination clause.
• Estimate your potential severance entitlement.
• Apply for Employment Insurance if appropriate.
• Obtain legal advice before accepting any severance package or signing a release.

A severance agreement is more than paperwork—it is often a legally binding contract that can permanently affect your rights. Taking a little time to obtain legal advice before signing anything can make a substantial difference in the compensation you ultimately receive.