Don’t Sign Away Your Employment Termination Benefits, You may Regret it

Employment Termination and Reasonable Notice


Employers rarely offer reasonable notice at the time of dismissal; instead they may offer a different form of financial compensation.  Employment termination can be expensive for an employer and these kinds of provisions may save them a significant amount of money.


If termination occurs and the employer makes an offer and you accept the deal, your reasonable notice employment termination benefits may go down the drain, and you may receive much less in comparison to the reasonable notice you were otherwise entitled to. Some examples of provisions an employer may offer are:

  • -reasonable working notice or


  • -an amount roughly equivalent to what an employee would receive during reasonable working notice.  This can be paid in two ways:


  • 1) as a  lump sum payment


  • 2) as a salary continuance

Salary continuances can get complicated.  A typical package is usually presented upon dismissal, and the employee is encouraged to sign a release form.  The idea of receiving a salary without working for it may be tempting for someone who has just been fired.  Initially, it may ease the pain a bit, but as mentioned before, once someone accepts, their rights to reasonable notice employment termination benefits disappear. 


Furthermore, a salary continuance gives the employer a lot of power over an employee; long after the date of dismissal.  The employer controls the length of time over which the salary continuance is offered and they also include a formula within the package that allows them to reduce or cut pay altogether once the employee finds new employment.


Employment Termination Benefits Vs. the Salary Continuance


Salary continuance packages typically tend to be much less than reasonable notice.  Stock options, commissions, bonuses, pension and other benefits aren’t generally included in these types of plans. An employee also has to wait for payment over a period of time and he / she may have to pay more taxes with a salary continuance in comparison to a lump sum payment.


What’s worse is that the entire contract may be written to give the employer unfair control over certain aspects of the deal. Non-compete and confidentiality clauses may be included within the salary continuance. The employee may also be forced to report to the employer and provide proof of their job search.  If the employer decides the employee’s efforts aren’t sufficient, the employer can completely cut off the salary continuance payments. The question is: now that you’ve been fired, do you still want your ex-employer calling the shots?


Employment Termination Benefits - What can Happen if You Refuse an Offer


If, at the time of dismissal, you are made an offer that is less than reasonable notice, you have the right to refuse; unless you have an employment contract that states otherwise.  An employer presenting a salary continuance that is less than reasonable notice results in a wrongful dismissal, unless you accept it.
If you do not accept the employer’s offer, you have the right to make a claim.  Even if a salary continuance has been rejected, employers have been known to make salary payments anyways.  Don’t let this confuse you; a wrongful dismissal has still occurred and you still have the right to take legal action.  If your employer owes any damages, the amount paid by the salary continuance will likely be deducted from the damages owed.


There is also the option of obtaining a court order which will force the employer to pay reasonable notice in a lump sum instead of salary continuance. Of course, much depends on your individual situation.  What many employees discover is that they have much more power than they realize.  So, before you sign away your rights, find out what your employment termination benefits are really worth by contacting Employment Termination Lawyer, Bob Yeager.  

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