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Severance Package
I live and work in Mississauga, Ontario, Canada. I am 52 years old, have 32 years of work experience, 20+ years in sales. My boss recently asked me if I was happy in my current sales job (I said I was but I’m not) and said if I wanted out he’d give me a package. I’m one of the top producers and currently make $90K in salary, $10k in bonus. I’ve worked for Company A for 8 years, but was not always on a salary. I was on straight commission for the first 4 years, then switched to salary plus bonus the last 4 years (to even out my pay fluctuations). Company A employs me, and all the sales reps, and owns the accounts, for Company B. Company B makes the products that we sell. In essence, a lot of people’s jobs at Company B are directly impacted by us reps, at Company A, and vice versa. And because of this, each company’s employees must work together to achieve results, but lately the employees at Company B are affecting my sales (which is why I’m not happy). My boss and the President at Company B talk regularly-ish to ensure everyone is contributing. And I’ve been told, changes to personnel at Company B are going to be made in Sept.
Given my age, work experience and achievements with Company A (and B), if I were to leave and ask for a package, how much severance would I be entitled to?
What amount would be considered a reasonable package?
Would I be given more if they “forced me out?”
Given my employer is Company A, but my sales directly impact Company B, could I be compensated from both companies or only Company A?
User deleted comment on 07/06/20 at 7:07AM UTC
Anonymous
07/05/20 at 6:04PM UTC
My mom has this happen in her late 50s and has never recovered. I would be leery of accepting anything without another role in the horizon.
Anonymous
07/07/20 at 12:03AM UTC
Yes, I hear you. That happens sometimes. And I hope your Mom finds peace soon. I’m a firm believer in thinking all will turn out for the best, in all situations, and that’s what’s driving me now. Either my current situation will improve or I will find a better opportunity that aligns more with my personal values. Thank you for this.
Anonymous
07/05/20 at 4:56PM UTC
If you're not ready for retirement, you might want to consider holding off on accepting any package until you see what the options are like in your field. Ageism is a real thing, and it may be harder/take longer to land that next job than you think.
In 2016 my husband was laid off from his job with a major tech firm, where he'd worked for 17 years. Aside from the shock (he wasn't expecting his department to get caught up in the RIF) we weren't too worried, because they gave him a very generous severance package: six months at full salary (plus all his accrued vacation, of course), a full month under company insurance, and three months of services from a respected career consulting firm. With that, plus unemployment, we figured everything would be fine. He had, over all, more than 30 years of experience and steadily increasing responsibility as a programmer and DBA (some with some pretty prestigious companies), a hot skill set, and really good references -- we figured he'd find something else pretty quickly, especially as we live in a tech-heavy area. There was only one problem: He was in his mid-50s. He could barely get anyone to talk to him and, after NINE months, finally had to accept the job from hell with an abusive boss at a much lower salary, more than an hour away from home.
That lasted for about a year and a half. During that time we heard similar stories from a lot of other people in similar situations (Some with much less generous severance packages).
I don't know if things are like that in your industry, or area, but unless you're really unhappy where you are and fairly confident that you'll be able to get work again soon, I'd say no to the package, but start looking elsewhere for a soft place to land.
BTW, my husband is now working in a much, much better place, with work and co-workers he enjoys, but it was a hellish few years, despite a great severance package.
Anyway, just my two cents, for whatever they're worth in today's market.
Anonymous
07/06/20 at 11:57PM UTC
Oh gosh! That sounds like the job from hell for your husband, but unfortunately I can relate. My current boss, (the one that pays me that is,) also has temper tantrums and freaked on me just last week, for about the umpteenth time! Just because he was having a bad day...nothing at all to do with my job performance! I’m starting to put the feelers out for something else, but haven’t gotten overly serious about it just yet. I’m happy to hear your husband landed on his feet and now works for a job that he likes and is liked by his boss/peers! Total win/win there! That’s the ultimate goal. Thank you for sharing. This just confirms there will be a silver lining for me too!
Anonymous
07/05/20 at 12:51PM UTC
There is a difference between a severance package and an early retirement package in my opinion. The second one would be higher (and offered to folks who are not in an adverse situation) either because they know they are going to have to cut heads soon or some other restructuring. I guess I read your situation more like that than a severance. I’d sure negotiate it as such!
Anonymous
07/06/20 at 11:49PM UTC
Ok thank you for this insight. This is helpful.
Anonymous
07/04/20 at 5:25PM UTC
Canadian HR Director here. Given your age, years of service, high salary and the state of the economy, you shouldn’t be given less than 8 months pay, a prorated bonus and benefits for x number of weeks. Depending on what kind of fleet program you’re on (car allowance or actual car) this may be included as a benefit. Quick comment to the calculator suggest above: it doesn’t consider common law entitlements. Hope this helps!
Anonymous
07/06/20 at 11:48PM UTC
Yes, this is very helpful. I’ve received a lot of replies that have mentioned 1 week for every year of service, but as you mentioned, I would think I would be entitled to more because of my age, my success and the number of years I’ve been working, so thank you for this. It’s nice to know my years of working would count for something.
Anonymous
07/03/20 at 3:07PM UTC (Edited)
It looks like in Canada you receive 1 week of pay for each year of service with a max of 26 weeks. Employers are required to give severance pay. There is a difference between termination pay and severance pay. Here is a calculator that might help you estimate your severance pay. https://www.labour.gov.on.ca/english/es/tools/severance/index.php.
Severance pay is to keep you financially whole for a period time to adjust to the loss of employment while you are looking for your next position. If you have some ability to negotiate terms than have the company add in outplacement services plus the severance pay. The cost of outplacement services should not be deduction from a severance-it is paid for by the company. You might need about 6 to 8 weeks of outplacement. You want an outplacement firm that has experience placing employees in your industry or entering another career choice of your interest. Here is the termination pay calculator https://www.labour.gov.on.ca/english/es/tools/termination/index.php
Most people are better off with severance pay then termination pay. Hope this helps.
Anonymous
07/03/20 at 4:28PM UTC
This is great and very helpful! Thank you.
Tréasa Fitzgibbon
Career Coach & Strategist for women
179
07/03/20 at 2:09PM UTC
I am not an expert on employment law but from my own experience in corporate every single company has a different policy when it comes to offering packages for termination of employment. These are often related to years of service and title e.g. you could get 1 week to 4 weeks of pay for each year of service, up to a limit - this will vary dramatically. I would recommend you go back to your manager and just say that he has piqued your interest and you would like to hear more about what is on the table. This will then allow you to make a decision on whether this aligns with your personal goals e.g. early retirement, look for another role in a more suitable organisation etc.
Anonymous
07/03/20 at 3:10PM UTC
Oh ok thank you. I’m not ready to retire just yet, so I would definitely have to look for another job, but just not sure in what job/industry. But thank you for this insight on number of weeks I should be granted.
Barbara Fernie
11
07/05/20 at 4:57PM UTC
There’s a lawyer in the GTA that deals with those cases specifically. There’s even an online severance calculator. I can’t remember the name but I’m sure you’d find it if you googled lawyer GTA/ severance calculator it’d show up...good luck ✅
Anonymous
07/06/20 at 11:43PM UTC
Ok perfect! Thanks Barbara.
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