Losing your job can be a stressful and emotional experience. Whether you were terminated due to downsizing, performance issues, or other reasons, it is essential to understand your rights and options. If you have been let go, here are some key things you need to know before signing any documents and as you navigate this challenging situation. Most employers offer only the minimum, which is often about a quarter or even less of what you are owed. Why? Because employees sign without seeking legal advice.

Do I Have to Sign a Termination Letter Right Away?

When your employer informs you of your termination, they may ask you to sign a termination letter immediately or within seven days. You do not have to sign immediately or within any timeframe they provide. It is crucial to pause and get legal advice immediately.

Understanding Your Rights

Under Ontario’s Employment Standards Act, 2000 (“ESA”), you have certain rights, such as the minimum statutory notice of termination or pay in lieu of notice, severance pay, etc. However, absent an enforceable termination clause that limits your termination entitlement to the ESA minimum, you are entitled to common law reasonable notice, which is generally much more than the ESA minimum standards.

Consequences of Signing Severance Documents

Termination letters often include a “full and final release” to prevent terminated employees from pursuing further rights after they sign it. In addition to statutory or contractual entitlements, employers usually offer extra benefits in exchange for signing this full and final release, such as additional severance pay, extended benefits, outplacement services, or other forms of compensation.

By signing the release, you agree to receive the extra benefits and give up your right to sue for any additional claims related to your employment or termination. In Hall v. ESC Automation Inc., 2023 HRTO 1676, an employee’s application at the Human Rights Tribunal of Ontario (“HRTO”) was dismissed because the employee had already voluntarily signed a full and final release. Therefore, they lost the right to submit the human rights claim to pursue extra entitlements.

Your Right to Seek Legal Advice

Your employer cannot force you to sign any termination documents right away. You have the right to seek advice from an independent lawyer before signing. If you are pressured or rushed into signing a severance agreement or final release without enough time to seek legal advice, you could challenge the validity of these documents. In Rubin v. Home Depot Canada Inc., 2012 ONSC 3053, the Ontario Superior Court of Justice found the employer pressured the employee, suggesting that he would only receive termination package benefits if he signed the termination documents, making the employee believe he had no other option. As a result, the signed termination letter and release were unenforceable. The employee was awarded a 12-month reasonable notice period under common law, almost doubling the 28 weeks offered by the employer.

Understand Your Options

You are not obligated to sign any termination documents, especially when the termination package is less than what you are legally entitled to. By choosing not to sign the release, you can retain the right to pursue additional claims or entitlements under common law and start your negotiation for a more favourable package with your former employer.

If the severance package is far below your legal entitlement and the negotiation does not result in any improvements, you may have to resort to legal procedures. Under Ontario’s Limitations Act 2002, you must file a claim in court within a maximum of two years from the date of termination to avoid losing the right to sue. Further, if your termination is a result of discrimination under the Ontario Human Rights Code (“Code”), you can also consider filing a case with the HRTO within one year from the termination date.

Practical Steps

Here are some practical steps to take after being let go:

1. Engage Legal Counsel: Have a qualified lawyer review any severance documents. These are complex documents understood by lawyers. Even a few words misplaced can entitle you to payment four times the minimum ESA standards.
2. Document Everything: Keep records of conversations, emails, and any evidence of your termination. This documentation can be crucial if you decide to pursue legal proceedings.
3. Timelines Matter: Contacting a lawyer immediately is your best strategy to protect your rights. While you have two years to sue there are obligations to mitigate by finding a job. Ultimately remember the two-year limit under Ontario’s Limitations Act 2002, and the one-year limit under the Code. If you are considering a legal proceeding, do not miss the deadlines.

Being let go is never easy, but do not rush to sign anything, even if your employer asks you to sign the severance documents within a specific timeframe. Consult an employment lawyer to ensure you are treated fairly and receive the compensation you deserve. Signing a release usually forfeits your right to seek additional compensation or take legal proceedings against your former employer. Ensure you fully understand the implications before signing.