The ABCs of severance packages

By Peter Merrick
|Canadian HR Reporter|Last Updated: 09/24/2002

For most employers the question is no longer “Are we in a recession?” but “How bad will it get before things get better?” As job losses mount, severance has become the hot topic in corporate offices and in cubicles across Canada. With layoff notices mounting throughout 2001, there’s a renewed effort among employers across the country to understand the ABCs of severance packages.

We can choose to use whatever language we like: downsizing, rightsizing or firing, in the end, the result of losing one’s job can be devastating. Companies provide severance packages for a range of reasons, and most firms are good corporate Canadian citizens, wanting to help their former employees. Their reasons vary from wishing to be known as fair so they can, perhaps in the future, recruit top talent when the economy improves or they may want laid-off workers to have some reason to sign legal agreements designed to protect the company.

Legal aspects