Never accept the first severance package your employer offers you. In New Brunswick, employers generally only offer the bare minimum 2 to 4 weeks required by the Employment Standards Act. By consulting a lawyer to negotiate under Canadian common law, you could be entitled to up to 24 months of pay depending on your specific age, tenure, and job position.
When you are unexpectedly handed a termination letter, the severance offer attached might look mildly generous at first glance. However, the vast majority of initial severance packages presented in New Brunswick are drastically lower than what the employee is actually legally entitled to under Canadian common law.
Whether you are a senior executive in Saint John, a middle manager in Moncton, or a frontline worker in Fredericton, you have the absolute right to negotiate. Understanding the massive difference between provincial statutory minimums and your true legal entitlements is the key to securing the vital financial bridge you need while actively searching for a new job. 📍
Step-by-Step Process in New Brunswick
Negotiating a severance package requires treating your termination not as the end of a relationship, but as a formal business transaction. Utilizing professional legal representation maximizes your leverage.
Step 1: Secure Time to Review the Initial Offer
Employers often impose an artificial and intimidating deadline, demanding you sign the package within 24 or 48 hours. Under Canadian law, you are legally entitled to a reasonable amount of time to seek independent legal advice.
Politely inform your human resources representative that you will take the documents home to review with a law firm before making any final decisions. Do not sign anything in the termination meeting.
Step 2: Evaluate the Common Law Bardal Factors
An employment lawyer will calculate your true severance value using the “Bardal Factors,” named after a famous Canadian Supreme Court case. These critical factors include your current age, the total length of your service, the specialized nature of your position, and the current economic difficulty of finding similar employment in New Brunswick. 📈
For example, a 60-year-old manager who has worked at the same company for 20 years is entitled to significantly more common law notice than a 25-year-old employee who worked there for just one year.
Step 3: Review Your Original Employment Contract
Before aggressively demanding more money, your lawyer will meticulously review the original employment contract you signed when you were first hired.
If the contract contains a legally binding, carefully drafted termination clause, your severance might be restricted to the bare minimums. However, due to recent shifts in Canadian employment law, many older corporate contracts are completely invalid and totally unenforceable under modern New Brunswick legal standards.
Step 4: Have Your Lawyer Negotiate Formally
Rather than arguing with your former boss yourself and letting emotions run high, your lawyer will send a comprehensive legal demand letter outlining exactly why the initial offer is inadequate. ⚔
This letter will formally demand proper common law pay in lieu of notice, the continuation of your workplace health benefits during the notice period, and a positive letter of reference to assist your future job hunt.
How Much Does a Severance Lawyer Cost in New Brunswick?
Investing in professional legal advice almost always pays off exponentially when negotiating a severance package. Common fee structures in the province include:
- Initial Consultation Fee: A comprehensive legal review of your termination letter, original contract, and initial severance offer usually costs between $250 and $500 CAD.
- Contingency on the Uplift: If you proceed with negotiations, many law firms will take 25% to 30% of the additional money they negotiate above the employer’s original baseline offer. This means you safely keep 100% of the initial offer in your pocket.
- Tax Implications: Remember that the CRA treats common law severance as a “retiring allowance.” Your employer will legally withhold income tax before issuing the cheque, though you can often negotiate to have the funds transferred directly into your RRSP to delay the tax burden.
How Long Does the Process Take?
Having a lawyer review your package and draft an aggressive, legally sound response usually takes 1 to 2 weeks. From there, back-and-forth negotiations with the employer’s legal team typically resolve the matter within 3 to 6 weeks. ⏱
If the employer stubbornly refuses to negotiate fairly and you must formally file a wrongful dismissal lawsuit at the Court of King’s Bench, the litigation process can take anywhere from 6 to 18 months to reach a final, binding resolution.
Frequently Asked Questions (FAQ)
Is it mandatory to sign a Full and Final Release?
You should only sign a Full and Final Release if you are formally accepting the newly negotiated common law severance package. You absolutely do not need to sign a release just to receive your basic, statutory minimum severance under the Employment Standards Act. The minimums are your guaranteed right.
What happens to my severance if I find a new job right away?
It depends on how your severance is structured. If you negotiate and settle for a single lump-sum payment, you get to keep all the money even if you start a new job the very next day. If your severance is paid via “salary continuation,” finding a new job might trigger a mitigation clawback clause, reducing your ongoing payments.
Can the employer withdraw their original offer if I ask for more?
Technically, yes, an employer can withdraw a common law offer if you reject it to counter-offer. However, in reality, this is extremely rare. Employers want you to sign a release just as much as you want a fair package, as it completely protects them from future lawsuits.
Do I get my bonuses included in the severance package?
Generally, yes. Under Canadian common law principles, you are entitled to be kept “whole” during your reasonable notice period. This means your severance should accurately reflect your total compensation package, including your base salary, expected standard bonuses, commissions, and vehicle allowances.
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