How to negotiate severance after being laid off


Being laid off can

be a frustrating and scary time for any IT professional, but keeping a level head

is vital – especially when it comes to negotiating your severance package.



Even if you haven’t

been laid off, it’s valuable to know your rights and your options when dealing with

your employer.



Be sure to check out

this recently published story about how to ensure you get a fair severance

package.



Or if you don’t like

reading, check out my one-on-one interview with Toronto-based employment lawyer,

Stacey Ball.



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And for those thinking

about leaving IT after being laid off (or if you anticipate being laid off),

head on over to this week’s story about why laid off IT pros shouldn't change

careers.



Comments

Brad Marks wrote re: How to negotiate severance after being laid off
on Mon, Feb 23 2009 2:02 PM

As an Ontario based employee and after working in IT sales (senior management level)with a large global (US based) IT hardware manufacturer for almost 13 years, I was terminated due to a change in leadership and new direction. Many US companies do not know nor understand Canadian labour law and subsequently will provide a severance package commensurate with local US law. Canadian labour law is much less strict than the US and better for the employee. Subsequently, I hired a lawyer specializing in labour law to go after a better settlement. For senior management/executive level positons, 1 month per year of service is standard (by precedent). Many factors come into play that affect the amount of overall severance. Age, seniority, compensation and current economic conditions (ie. how quickly the individual will find work at a similar level and payscale) to name a few. Educating the US employer is very important and be best left to a professional (hence why I hired a lawyer). It is important that the severance package reflect your total compensation not just base salary. Compensation would include sales bonus, car allowance, office allowance, RRSP contributions, stock options, etc. Make sure this is all included in the settlement discussion. It is also important that you keep a detailed log of all your daily activities that help mitigate the damages (ie.settlement) to your employer. This means, your employer wants to see what you are doing to find another job (to help mitigate the amount they have to pay you as settlement). All discussions, meetings, interviews, resume creation, networking events, etc. should be documented. As well, the settlement offered by your employer may include a "claw back" clause whereby if you find a job within the period of settlement payout (say they gave you 10 months and you found a job within 5 months of your termination), you may have to pay back in full, or a portion of, the balance. Last, when looking for a lawyer, most charge an hourly rate. Depending upon law firm, this will range between $350 to $800 depending upon experience. Most will also charge a consulting fee to meet with you first. Try to get this waived or if you do hire them, they will credit you. For relatively straightforward cases, you can go with an associate for a lower hourly rate. Bay Street firms will charge more than midtown firms or firms north of the city. You get nothing more from a Bay Street firm so do your best to find a lawyer you're comfortable with and has expertise with labour law and with US firms if applicable. Personally, I would stay away from any law firm that wants to charge you a percentage of the settlement outcome. Some will do this and charge a lower hourly rate as well. Go straight hourly is my recommendation. Expect a 3-6 month period. Most cases settle without going to trial within this period.