A Severance Letter is a crucial document used in Canadian employment law when terminating an employment relationship without cause. It serves as both a formal notification of employment termination and a detailed outline of the severance package being offered to the employee. The document must be carefully drafted to ensure compliance with federal and provincial employment standards legislation, including the Canada Labour Code and relevant provincial Employment Standards Acts. Severance Letters typically include information about the termination date, severance pay, benefits continuation, outstanding compensation, and post-employment obligations. They may also address specific circumstances such as equity compensation, commission treatment, and outplacement services. The document often forms part of a larger termination package that includes a release agreement and various schedules detailing specific aspects of the severance arrangement.
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1. Date and Address Block: Formal letter heading including current date and employee's full contact information
2. Acknowledgment of Employment: Confirmation of employee's position, length of service, and last day of employment
3. Notice of Termination: Clear statement of employment termination and effective date
4. Severance Package Overview: Summary of the total severance package being offered
5. Financial Terms: Detailed breakdown of severance pay, salary continuation, bonus treatment, and benefit continuation
6. Return of Company Property: Requirements and timeline for returning company assets
7. Confidentiality Obligations: Reminder of ongoing confidentiality obligations
8. Release Terms: Reference to the release agreement and conditions for receiving severance
9. Acceptance Timeline: Deadline for accepting the severance offer
10. Contact Information: Who to contact with questions about the severance package
1. Outplacement Services: Details of career transition support if offered
2. Reference Letter: Terms of reference letter provision if agreed
3. Non-Competition/Non-Solicitation: If applicable, reminder of post-employment restrictive covenants
4. Stock Options/Equity: Treatment of outstanding equity compensation if applicable
5. Commission/Sales Pipeline: Treatment of outstanding commissions or sales pipeline for sales roles
6. Personal Items Collection: Arrangements for collecting personal belongings if employee is off-site
7. Internal/External Communication: Agreed messaging about the employee's departure
1. Schedule A - Severance Calculation: Detailed breakdown of severance pay calculation including salary, benefits, and other compensation elements
2. Schedule B - Benefits Continuation Details: Specific information about continuation of each benefit type and duration
3. Schedule C - Release Agreement: Full text of the release agreement that must be signed to receive severance
4. Schedule D - Outstanding Equity Details: List of outstanding stock options, RSUs, or other equity compensation and their treatment
5. Schedule E - Company Property Checklist: Itemized list of company property to be returned
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