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Employer trying to change severance wording with salary increase

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  • Dec 1st, 2020 5:47 pm
[OP]
Member
Jan 3, 2008
276 posts
29 upvotes
Victoria

Employer trying to change severance wording with salary increase

Hi all,

I'm in a really strange situation with my employer trying to change the wording on my severance, and I'm wondering what your thoughts are. I've been there a long time, so this makes a difference for me.

Original Version: 6 weeks’ salary, plus an additional 3 weeks for every completed year of employment beyond 2 years, up to a maximum of 16 weeks.

New Version: 6 weeks’ salary, plus an additional 3 weeks for every completed year of employment beyond 2 years, up to a combined maximum of 16 weeks in total.

I never carefully read my original wording before, and assumed it to compute the way they've proposed to rephrase it, where the formula is 6 + 3n, where (6 + 3n) <= 16 weeks (the grand total is 16 weeks max). But with them pushing for wording changes, I re-read my original language, which is leading me to also think the reader could interpret the original phrasing as 6 + 3n, where only 3n <= 16 weeks (making the grand total 22 weeks max). Am I crazy?

I know the change here is trivial, but by them trying to change the wording it's a pretty clear indication they recognize the original version could be interpreted differently from the interpretation that best serves them.

Should I push back and insist my original wording stays? Or is there no way anyone would award me 22 weeks anyway, making this a non-issue?

Thanks for your input!
Last edited by dealsvic on Dec 1st, 2020 12:30 pm, edited 1 time in total.
19 replies
Deal Addict
Nov 13, 2013
2578 posts
1302 upvotes
Ottawa
Well a few issues in your decision. In terms of how this will be interpreted that is a legal question and I am sure someone will chime in. It seems to me you are right. In terms of deciding if it is worth pursuing you need to look at how much is the raise and do they have to give it to you? I mean are you in union or regulated some other way or is it purely discretionary. A related issue is the size of the company. If you are dealing with some faceless HR person you can push back. If it's a smaller company and your actual manager asking this the calculus changes. Probably in the former I would accept unless it seems like you might be laid off imminently and this is a bit of a scam on their part. You could add in the old language applies until 2022 or something. Especially in a small company but even a medium size company if you poison the relationship you are basically finished so tread carefully.
Member
Feb 15, 2018
333 posts
406 upvotes
Very complicated matter without seeing your entire termination clause. But from the snippet you just showed us, that severance clause appears problematic in it's wording such that it could render the whole contract unenforceable. in other words, their contract is not worth the paper it is printed on and whether or not you sign it should make no difference - except keep the peace with your boss. However, when stuff hits the proverbial fan and you have to sue, they will have a hard time relying on that clause to limit your severance.

The interesting part is the raise. Under common law, in order to change conditions of an employment contract you have to offer the employee something of value (consideration). They got that part right but got the wording of the clause wrong. I would gladly accept their raise knowing fully well that they have a very weak severance clause. Without getting too technical, the reason judges hate clauses specifying maximum number of weeks is because if legislated employment standards minimum notice periods ever change to something more generous than your contract's maximum, your employer will be in violation of the employment standards clause. Believe me, there are cases where judges have stated this position and struck down the severance provision not because it violates current employment standards but because it could violate future employment standards.

I take it that your company at least has some not so competent HR person and the saying little knowledge is dangerous would apply to this case.

This is not meant to be legal advice. I encourage you to consult with an employment lawyer before making a decision about the new offer.
Deal Fanatic
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Jan 31, 2006
7077 posts
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Toronto
The original version, entitled you up to 22 weeks, the revised entitled you up to 16 weeks.

Unless you got terminated >= 8 years , you will not get 22 weeks.
[OP]
Member
Jan 3, 2008
276 posts
29 upvotes
Victoria
Thanks everyone for the input!
canuckstorm wrote: Very complicated matter without seeing your entire termination clause. But from the snippet you just showed us, that severance clause appears problematic in it's wording such that it could render the whole contract unenforceable. in other words, their contract is not worth the paper it is printed on and whether or not you sign it should make no difference - except keep the peace with your boss. However, when stuff hits the proverbial fan and you have to sue, they will have a hard time relying on that clause to limit your severance.
Hey canuckstorm - what leads you to the bolded statement? Is limiting severance generally not enforceable in BC? From looking at Employment Standards details online, it looks like the law would entitle me to less severance than my agreement does, at least from looking at the table on that site if you expand the section about "paying compensation for length of service". Maybe that's not a good example to go from?
[OP]
Member
Jan 3, 2008
276 posts
29 upvotes
Victoria
cgtlky wrote: The original version, entitled you up to 22 weeks, the revised entitled you up to 16 weeks.

Unless you got terminated >= 8 years , you will not get 22 weeks.
I've already been employed there longer than that. :)
Deal Fanatic
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Jan 31, 2006
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Toronto
kurt16 wrote: I've already been employed there longer than that. :)
if you did not signed the revision, then your employer should follow the original version of the severance payout.
Deal Guru
Feb 29, 2008
14213 posts
10524 upvotes
Some of these employers are pathetic.
Deal Addict
Oct 24, 2010
1502 posts
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Ottawa
cgtlky wrote: The original version, entitled you up to 22 weeks, the revised entitled you up to 16 weeks.

Unless you got terminated >= 8 years , you will not get 22 weeks.
Agreed. Commas matter, and (not legal advice because I'm not a lawyer) I believe the courts tend to favor the plaintiff in cases of ambiguity.
Deal Addict
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Mar 29, 2008
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What’s worth more to you - the previous/existing ambiguous termination provision (that would probably be interpreted in your favour in the event of termination), or the salary increase with the clear termination wording (that you thought was your entitlement anyway)?
Member
Feb 15, 2018
333 posts
406 upvotes
kurt16 wrote: Thanks everyone for the input!



Hey canuckstorm - what leads you to the bolded statement? Is limiting severance generally not enforceable in BC? From looking at Employment Standards details online, it looks like the law would entitle me to less severance than my agreement does, at least from looking at the table on that site if you expand the section about "paying compensation for length of service". Maybe that's not a good example to go from?
First we have to clarify what the "law" entitles you to. Employment Standards is just one set of employment law governing termination pay and it just highlights the minimums employers can pay you - not a maximum. The other type of law is called Common Law and is run separate from Employment Standards. Common Law is run by judges and they decide what is reasonable severance. Under common law we do not even have a written formula for how much severance you should/can get as it is entirely up to a judge's discretion. However, the historical trend and practice among judges has been 1 month for every year worked. As an employee, you have the option to pursue your employer under Employment Standards or the Courts. You get way more money through the courts but it takes years to get your day in court and you would probably need a lawyer. With employment standards it takes a very short period of time to wrap up the case and you usually do not need a lawyer as the tribunal folks usually advocate for you. However, you get less money under this option but it is a guaranteed option and they have a cap on how much they can award.

Why I say your severance clause is useless is due to a technicality that judges have used to strike down termination clauses based on the premise that it could hypothetically potentially violate future employment standards due to its wording. I know it sounds like a very abstract concept and is really hard to explain to someone without knowledge in this field. Yours puts a limit of x number of weeks. What if 10 years from now employment standards minimums are upgrade to y weeks, yet you contract was limited to x weeks? That would automatically put your contract in violation of employment standards and the law of contract says you can not contract outside of legislation - making the contract null and void. That is why smart employers never put an absolute maximum cap. Instead, we would say "we will pay you a maximum of x weeks on top of whatever is the prevailing employment standards minimum".
Deal Addict
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Feb 3, 2005
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Georgetown
You are correct they are trying to limit to 16 weeks total instead of 22.

The key thing here is you should be looking at how much per year of service they are offering. 2 weeks / year as per my understanding is pretty much the minimum. 4 weeks is quite common (in professional fields). Not knowing your exact field and length of service makes it hard to evaluate things - but your comment that you have been there over 8 years makes me think 16 weeks is low.

I'm not sure what you are referring to when you mention a salary increase though?

The starting point of 6 weeks + 3 per year actually seemed reasonable as a starting point - but the cap is very questionable IMHO. One thing I will point out is many companies will pay more (ie. 4 weeks/year) but they will cap at 2 years and put a provision that it cuts off as soon as you have a new job. Get 3 weeks / year straight up seems much nicer IMHO... but in some professions, etc. you can theoretically get more... but lawyer costs, etc. should be factored in.

Maybe you should consult a lawyer?
[OP]
Member
Jan 3, 2008
276 posts
29 upvotes
Victoria
Tiberius wrote: I'm not sure what you are referring to when you mention a salary increase though?
I mean it's annual salary increase time, and packaged with my salary increase is a revised employment agreement to be accepted. The way they're posturing is that if I don't accept the revised version of the agreement I don't receive an increase.

I'm going to push back. There are some other details elsewhere I need resolved too. I guess this is the employment agreement all newer employees receive, and I was hired long before the current executive took over. I have a decent amount of bargaining power so I'm going to get it sorted out. I'm not going to try to change it to anything more than I previously had, but I'm certainly not accepting less.
Deal Addict
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Feb 3, 2005
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kurt16 wrote: I mean it's annual salary increase time, and packaged with my salary increase is a revised employment agreement to be accepted. The way they're posturing is that if I don't accept the revised version of the agreement I don't receive an increase.

I'm going to push back. There are some other details elsewhere I need resolved too. I guess this is the employment agreement all newer employees receive, and I was hired long before the current executive took over. I have a decent amount of bargaining power so I'm going to get it sorted out. I'm not going to try to change it to anything more than I previously had, but I'm certainly not accepting less.
So you are still employed with them and are getting an annual raise... but they want you to sign something that outlines what they would give you "if" they ever let you go? Interesting... It makes it harder to push back when you are still working there and hoping to keep on good terms... As others have pointed out, the clause may not be enforceable anyway... so you could sign and ask/fight for more if they ever let you go. If it previously allowed for 22 weeks, even insisting they keep it as it was seems reasonable.
[OP]
Member
Jan 3, 2008
276 posts
29 upvotes
Victoria
Tiberius wrote: So you are still employed with them and are getting an annual raise... but they want you to sign something that outlines what they would give you "if" they ever let you go? Interesting... It makes it harder to push back when you are still working there and hoping to keep on good terms... As others have pointed out, the clause may not be enforceable anyway... so you could sign and ask/fight for more if they ever let you go. If it previously allowed for 22 weeks, even insisting they keep it as it was seems reasonable.
I think I have the bargaining power to push back. They're coming up against a pressure point where they need me signed and I have unique experience and skills they need for the highest profile project they've had in a decade, so I can't see them letting the whole thing blow up over me keeping the severance wording I've already accepted and earned. It does seem to be causing some friction with HR but I'm sure that will all wash away quickly when this is done. I don't work with HR at all anyway.
Deal Addict
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Mar 29, 2008
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kurt16 wrote: I think I have the bargaining power to push back. They're coming up against a pressure point where they need me signed and I have unique experience and skills they need for the highest profile project they've had in a decade, so I can't see them letting the whole thing blow up over me keeping the severance wording I've already accepted and earned. It does seem to be causing some friction with HR but I'm sure that will all wash away quickly when this is done. I don't work with HR at all anyway.
What you could do gently is argue the salary increase/promotion is for merit, but if they throw in a reasonable bonus as consideration for signing the new agreement, you’d be happy to do so.
Deal Fanatic
Mar 21, 2010
5635 posts
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Toronto
Not a legal opinion, but I disagree that something has changed. To me it is just making it explicit. That second comma in the original statement, at least in my interpretation, limits the whole thing to 16 weeks anyway. Had there not been the second comma, I would agree that the 16 weeks refers solely to the "additional" part and therefore the base of 6 weeks is on top.

6 weeks’ salary, plus an additional 3 weeks for every completed year of employment beyond 2 years, up to a maximum of 16 weeks. = max 16 weeks

6 weeks’ salary, plus an additional 3 weeks for every completed year of employment beyond 2 years up to a maximum of 16 weeks. = max 22 weeks
[OP]
Member
Jan 3, 2008
276 posts
29 upvotes
Victoria
Manatus wrote: Not a legal opinion, but I disagree that something has changed. To me it is just making it explicit. That second comma in the original statement, at least in my interpretation, limits the whole thing to 16 weeks anyway. Had there not been the second comma, I would agree that the 16 weeks refers solely to the "additional" part and therefore the base of 6 weeks is on top.

6 weeks’ salary, plus an additional 3 weeks for every completed year of employment beyond 2 years, up to a maximum of 16 weeks. = max 16 weeks

6 weeks’ salary, plus an additional 3 weeks for every completed year of employment beyond 2 years up to a maximum of 16 weeks. = max 22 weeks
Yeah, while I do partially agree, I just think if there was no potential difference in how the computation is interpreted, why are we going through this hassle of changing it? They should be agreeable to leaving it the way it is.
Deal Addict
Jan 1, 2017
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kurt16 wrote: Yeah, while I do partially agree, I just think if there was no potential difference in how the computation is interpreted, why are we going through this hassle of changing it? They should be agreeable to leaving it the way it is.
Not worth the fight to be honest.
Deal Guru
Feb 29, 2008
14213 posts
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I had to sign something like this when my company was purchased. They give you money so you can’t sue them later. They’re not just being nice. Anyways, they started letting people go soon after.

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