Published on: September 23, 2025
Rushing to Sign? You Might Be Signing Away Thousands.
Getting let go is stressful — and when your employer hands you a severance package with a deadline, it’s tempting to just sign and move on.
But that piece of paper could be worth a lot more than what’s offered — and once signed, it’s often final.
In Ontario, severance agreements can include waivers of legal rights, low ball payouts, or clauses that silence you unfairly. Knowing what to look for before you sign could protect your income, your future claims, and your peace of mind.
This guide breaks down the most common red flags hidden in severance agreements — and what to do instead.
Read More:
Can You Be Demoted Without Warning in Ontario? Your Rights Explained
Probation Periods in Ontario: What Are Your Rights If You’re Let Go Early?
Resigned Under Pressure? It Could Still Be a Dismissal in Ontario
Unrealistic Deadlines to Sign
Many severance agreements come with a short deadline — sometimes just 2 or 3 days — to accept the offer. This pressure tactic is designed to push you into signing without getting legal advice.
But here’s the truth:
• You are not legally required to sign immediately.
• You have the right to request more time to review and seek counsel.
Why it’s a red flag:
Employers often use tight deadlines to prevent you from comparing the offer with what you’re actually entitled to under Ontario law — which may include termination pay, severance pay, vacation pay, and more.
Severance Offers That Are Below ESA or Common Law Minimums
Many employees assume whatever’s in the agreement is what they’re owed — but that’s not always true. Severance packages should meet at least the minimums set out in the Employment Standards Act (ESA) and often go beyond under common law.
What to look out for:
• Offers based only on ESA minimums, especially if you’ve been employed for many years.
• Severance pay that doesn’t include pay in lieu of notice, benefits continuation, or bonuses.
• A flat lump-sum payment with no breakdown of how it was calculated.
Why it’s a red flag:
Ontario courts often award much higher severance than what’s initially offered. Signing too quickly may cost you tens of thousands in missed compensation.
Waivers That Take Away Your Legal Rights
Severance agreements often include legal waivers — but not all of them are fair. Some clauses are written to shield the employer from any future claims, even if your dismissal was wrongful, discriminatory, or violated your rights under Ontario law.
Red flags include:
• Broad language that releases the employer from all legal claims, even unknown ones.
• Waivers that cover human rights violations, reprisal claims, or Employment Standards Act breaches.
• Clauses preventing you from speaking publicly about your experience or filing a complaint later.
Why it’s a problem:
Once you sign, these waivers are usually enforceable — meaning you could lose your right to challenge an unlawful or unjust termination, even if the severance was unfair.
Pressure to Sign Quickly — Without Legal Advice
Employers may frame severance agreements as “take it or leave it” offers, giving you a tight deadline or even implying you’ll lose the deal if you don’t sign immediately. This is a red flag.
Why it’s risky:
Ontario law doesn’t require you to sign a severance agreement on the spot. In fact, pressuring someone to sign without adequate time or independent legal advice can raise serious concerns — and in some cases, impact the enforce ability of the agreement.
What to do instead:
Always ask for time to review. A lawyer can:
• Evaluate whether the severance offer is fair.
• Ensure you’re not waiving rights you shouldn’t.
• Help you negotiate a better package.
Protect Yourself Before You Sign
Severance agreements aren’t just routine paperwork — they’re binding contracts that can impact your financial future, career options, and even your ability to speak about your termination. If something feels rushed, unclear, or unfair, it’s worth taking a step back.
Even a generous-looking severance offer might not reflect what you’re truly owed under Ontario’s Employment Standards Act (ESA) or common law. Many employees settle for less simply because they didn’t know better.
Before signing anything, consider speaking with an employment lawyer to review the terms and protect your rights. At Taman Singh Law, we help Ontario employees make informed decisions — with clear advice and no upfront fees.
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About The Author
Taman Singh is an employment lawyer with a focused practice in wrongful and severance negotiations. He is dedicated to advocating for employees and ensuring they receive the compensation they are rightfully owed. With a sharp understanding of Ontario employment law and a results-driven approach, Taman consistently helps clients navigate complex workplace disputes and maximise their severance packages.
