Can employee demand lump-sum severance? (Toughest HR Question)

Public or private sector, jurisdiction, terms of employment contract must be taken into account
By Colin Gibson
|Canadian HR Reporter|Last Updated: 07/14/2013

Question: An employee from our company has been offered a severance package with continuation of her salary for a specified period. However, the employee has made a formal request to receive her severance in a lump-sum payment. Are we required to comply with this request or can an employer decide how to structure the package?

Answer: The answer to that question depends on a variety of factors such as jurisdiction, whether the employment contract defines the severance package and whether the employer is in the public or private sector.

Employment standards statutes across Canada are generally uniform in their approach to severance payments made in lieu of statutory notice of termination — such payments must be provided in a lump sum.