The four numbers in a severance package

Ontario's Employment Standards Act sets minimum termination entitlements where its rules apply. Notice or termination pay and severance pay are separate calculations, and not every employee qualifies for both. An agreement cannot contract out of an applicable minimum standard.

The ESA figure is a statutory floor, not a complete valuation of the package. Contractual, common-law, human-rights, reprisal, or other issues may sit outside that number.

Common-law reasonable notice may be the largest part of the analysis. It depends on factors such as length of service, age, role, and the availability of similar work. The reading produces a range rather than a guaranteed number.

The contract may attempt to limit common-law entitlement through a termination clause. Whether that clause is enforceable is itself a legal question, and depends on how the clause is drafted and on the case law as it stands at the time of the termination.

Bonus and short-term incentive treatment is the third category. Ask whether the employee would have received the payment during the notice period and whether the employment agreement or plan clearly limits that entitlement on termination.

For executives and senior contributors, the bonus number can rival or exceed the base notice number. It is read early, not at the end.

Stock options, RSUs, and deferred compensation produce the fourth number. The reading covers the vesting position at the termination date, the treatment of unvested grants, the post-termination exercise window for options, and any acceleration triggers in the plan document.

The plan document is central, but the employment agreement and applicable law may also matter. Read them together, especially where the documents use different termination dates or treatment for vested and unvested awards.

The release language, non-disparagement clause, reference terms, benefits continuation, and outplacement support are the qualitative portion of the package. They are read after the four numbers because their negotiating room is partly a function of where the four numbers land.

The strength of the monetary offer affects negotiation priorities, but the non-monetary terms still need their own review. A broad release or a short benefits window does not become harmless because the headline payment is higher.