What Makes a Severance Package ‘Fair’? A Lawyer’s Checklist

When you're let go from a job, one of the first questions you'll ask yourself is: “Is this severance package fair?”

The answer isn’t always obvious — especially when the offer comes with legal jargon, tight deadlines, and pressure to sign. In Canada, many severance offers provide the bare legal minimum, even when the employee may be entitled to significantly more under common law.

At SeverEase, we believe you shouldn’t need a lawyer to understand what you’re signing — or to push back when an offer is low. This post walks you through exactly what makes a severance package fair, with a lawyer-developed checklist to help you assess your situation.

Understanding the Basics: ESA vs. Common Law Severance

In Canada, there are two layers to severance entitlements:

• Employment Standards Act (ESA): The minimum notice or pay your employer must give under provincial law.

• Common law notice: Additional severance that courts may award based on your position, age, tenure, and ability to find similar work.

Most severance packages start with ESA entitlements — but that’s not the full picture. In many cases, you're entitled to weeks or even months more compensation than the statutory minimum.

Lawyer’s Checklist: Signs of a Fair Severance Package

Use this checklist to assess your offer before signing anything. If you answer “no” to any of these questions, the package may not be fair — and you may want to negotiate.

1. Length of Service Considered?

Have they factored in how long you’ve worked for the company, including any previous service if you were re-hired?

2. Position and Seniority Reflected?

Does the offer account for your senior role, managerial responsibilities, or specialized skills?

More senior roles often mean a longer job search — and more severance.

3. Your Age and Job Market Considered?

Are you older, in a niche field, or part of an industry with limited opportunities?

Courts recognize that older workers or those in competitive markets may need more time to find new employment.

4. Benefits Coverage Included?

Does the offer continue your health/dental benefits through the entirety of the notice period?

Severance isn’t just about salary. Extended benefits are a key part of total compensation.

5. Bonus or Commission Included?

Does the severance include your average bonus, commission, or other performance pay?

If these were a integral part of your earnings, they likely should be part of your severance too.

6. Vacation Pay Accounted For?

Are you receiving all unused vacation pay as required by law?

Employers must pay out any earned vacation on termination — it's non-negotiable.

7. Reasonable Time to Review?

Were you given adequate time to review the offer and seek advice?

A fair employer won’t pressure you to sign in 24 or 48 hours. Take your time.

8. Full and Final Release Conditions Fair?

Are you being asked to sign a Full and Final Release waiving all legal rights — without being properly compensated?

If you’re giving up legal claims, you should be getting more than your minimum entitlements under employment standards legislation.

Final Thoughts: Fair Doesn’t Mean Generous — It Means Lawful and Reasonable

A fair severance package doesn’t have to be generous, but it should reflect your real legal entitlements — not just the company’s bottom line.

If you’re unsure whether your offer is fair, you’re not alone. That’s why SeverEase exists: to help you evaluate your package, respond with confidence, and negotiate a better outcome without costly legal fees.

Ready to Review or Respond to Your Severance Offer?

Download our free Severance Fairness Checklist or get instant access to our lawyer-drafted counteroffer templates. Get Started Now Disclaimer: This article is for informational purposes only and does not constitute legal advice.