Negotiating your Canadian severance package
What to Ask For in Your Canadian Severance Package: Key Protections & Benefits
Losing your job can feel like the rug’s been pulled out from under you. But here’s the truth: a severance package isn’t just a goodbye — it’s a negotiation. And if you know your rights and what to ask for, you can turn a tough moment into a stepping stone.
In Canada, many employees are entitled to severance pay or termination notice. But beyond the basics, there’s a whole list of negotiables that can protect your finances, health, and future career.
If you’ve been presented with a severance package, or you see signs that one’s headed your way, It’s important to understand what is legally owed to you and what’s up for discussion.
Understanding your legal rights
Before you start negotiating, it's essential to know what you’re legally entitled to. Every province in Canada has its own Employment Standards rules, and federally regulated workers (e.g. in banking, transportation) follow different laws.
At a minimum, most full-time employees are entitled to:
Notice of termination or pay in lieu of notice
Accrued vacation pay
Any unpaid wages or bonuses
In some provinces, like Ontario, you may also qualify for statutory severance pay if you’ve been with your employer for five or more years and the company’s payroll is over $2.5 million.
The difference between notice and severance pay
Notice of termination means your employer gives you advance warning of job loss. Pay in lieu means you’re let go immediately but paid for that notice period.
Severance pay is different — it’s meant to compensate you for your service and help bridge the gap while you find new work. Many people don’t realize you can negotiate both.
Let’s say your employment contract offers two weeks’ notice per year worked. If you’ve been there five years, that’s 10 weeks of notice — but your employer may offer a lump sum or salary continuation instead.
You can negotiate that amount based on your age, role, re-employment prospects, and how the layoff happened.
Need help calculating? Here's a good overview: Severance Pay Calculator (by employment lawyers)
What to ask for — beyond the basics
Once you know your minimums, it’s time to think bigger. The following items aren’t legally required — but they’re often negotiable. You won’t get what you don’t ask for.
Salary continuation or lump-sum payment
A lump-sum payout gives you money upfront, but may delay your eligibility for EI (Employment Insurance).
Salary continuation means you're still “on payroll,” which can help keep benefits active and may look better to future employers.
Many professionals ask for a combination: several months of salary continuation, followed by a lump sum.
Outstanding earnings and incentives
Make sure you ask about any money you're owed:
Unused vacation time
Personal days or banked overtime
Bonuses (especially if you were on track to earn one)
Commissions already earned but not paid
Equity, RSUs, or stock options — find out what happens to unvested shares and whether you have a grace period to exercise them
If any of these items are missing from your offer, ask for them to be clearly added in writing. Start your severance negotiations prepared by reviewing these email templates.
Protecting your health and mental health
A job loss can take a toll on your wellbeing. That’s why many employers are open to extending health benefits — especially if you ask.
Here’s what you might request:
Extended health and dental coverage for 3–12 months
Continued access to an Employee Assistance Program (EAP)
Coverage for therapy, medication, or counselling during your transition
An offer to convert your benefits plan to private coverage after it ends
You've got to ask to look out for yourself—especially in a complicated situation. Advocating for your needs isn’t just self-care; it’s survival. For many workers, particularly those supporting children or managing chronic health conditions, asking for clarity, flexibility, or additional support isn't optional—it's essential.
These conversations can feel uncomfortable, but they help ensure you're not overlooked or undervalued. Whether it's about severance, scheduling, or workplace accommodations, standing up for what you need protects not only your present but your future too.
Set yourself up for success
A good severance package doesn’t just protect the past — it helps prepare for the future. Employers may offer transition support, especially if they’re doing mass layoffs or brand reputation is a concern.
Here’s what you can ask for:
Outplacement services: career coaching, resume help, LinkedIn support
Training and re-skilling funds: Some people negotiate $1,000–$5,000 toward certificates, licensing, or even tuition
Job search support: access to recruiters or a letter of recommendation
Professional memberships or industry dues for your next role
Some companies won’t advertise these benefits — but will provide them if asked. Others work with outplacement firms as part of standard layoff protocols.
Ask for time — and legal advice
It’s common for employers to ask you to sign a release form in exchange for severance. But you do not have to sign it right away.
Ask for:
At least 7 to 10 business days to review the offer
Reimbursement for legal fees, or a one-time legal consultation
The chance to discuss with a financial advisor or employment coach
Signing a release waives your right to pursue legal action — so don’t rush. If the pressure feels off, that’s a red flag.
Your severance negotiation checklist
Print this and bring it to your HR meeting.
✔️ Severance pay — how much, how long, how paid
✔️ Salary continuation vs. lump sum
✔️ Accrued vacation, sick time, and bonuses
✔️ Commissions and equity compensation
✔️ Continued health and dental benefits
✔️ Mental health or therapy access
✔️ Career support: coaching, resume help, LinkedIn optimization
✔️ Upskilling or training fund
✔️ Reference letter or internal job referrals
✔️ Time to review and consult with legal/financial support
Real people. Real severance examples.
Sonia, Project Coordinator – Montreal
“I was given 6 weeks' salary — but asked for 3 more in exchange for signing early. They agreed. I also got $2,000 for a professional development course.”
Derek, Sales Manager – Vancouver
“I didn’t know I could ask about commissions, but I had three deals close after I was laid off. HR agreed to pay them out.”
Nur, Newcomer Tech Professional – Calgary
“My friend sent me the HireDiverse checklist. It gave me the courage to ask for outplacement help — and it paid off. I landed a new role two months later.”
Don’t go through this alone
Being laid off is tough. But you're not powerless. You have the right to ask questions, request clarification, and negotiate a better outcome for yourself.
Use this sample email template to open the conversation with HR. And remember, you’re not being difficult — you’re being smart.
Career advice for job seekers in Canada
At HireDiverse, we get it. Losing a job is more than a logistics problem — it's a human one. We provide resources for Canadian job seekers navigating layoffs, career pivots, and personal growth with confidence and clarity.
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