A layoff occurs when an employer temporarily or permanently reduces their workforce due to business reasons beyond individual employee performance. Unlike termination for cause, layoffs typically result from economic factors, restructuring, or operational changes.
With 50% of Canadian employers reducing production or laying off employees in anticipation of tariffs and major companies continuing workforce reductions, understanding your rights during layoffs has never been more critical.
Your Legal Rights: More Than Statutory Minimums
What TD Must Provide (Bare Minimum)
As a federally regulated employee, TD must provide minimum notice under the Canada Labour Code:
- 3 months to 3 years service: 2 weeks
- 3+ years service: 2 weeks plus 1 week per year (maximum 8 weeks)
These are absolute minimums. Most TD employees are entitled to much more under common law.
What You're Actually Entitled To (Common Law)
Courts typically award 3-4 weeks of severance per year of service, adjusted for:
- Your age (older workers get more)
- Your position level
- How difficult it is to find similar work
Real Examples:
- 12 years service, age 45, $80K salary: 12-15 months severance
- 5 years service, age 35, $65K salary: 5-7 months severance
- 20 years service, age 55, $150K salary: 18-24 months severance
What TD's Initial Severance Offer Typically Includes
Based on employee reports and legal cases, TD’s standard severance packages generally include:
Base Severance Payment: Usually 2-4 weeks per year of service, which exceeds statutory minimums but falls short of common law entitlements.
Benefits Continuation: Often limited to the statutory notice period, not the full common law period you’re entitled to.
Vacation Pay: Payout of accrued unused vacation time.
Bonus Considerations: Pro-rated annual bonus if you’re terminated part-way through the year (though many initial offers exclude this).
Pension Considerations: Clarification of your pension status and any employer matching that stops.
Release Agreement: Required signature releasing TD from all legal claims in exchange for the package.
What's Usually Missing from Initial Offers
Full Common Law Entitlement: The package likely represents a fraction of what courts would award.
Extended Benefits: Health, dental, and life insurance often end far sooner than your notice period would suggest.
RRSP Contributions: Employer matching typically stops immediately rather than continuing through the notice period.
Bonus Payments: Many initial offers exclude bonuses you would have earned during the notice period.
Outplacement Services: Career transition support is often not included or is minimal.
Here you can read about recent layoffs at popular companies such as Stericycle, RBC, Hudson’s Bay and Bell layoffs.
How to Calculate What You're Actually Owed
Step 1: Determine Your Common Law Notice Period
Use this general framework:
- 0-5 years service: 2-6 months
- 5-10 years service: 6-12 months
- 10-15 years service: 12-18 months
- 15-20 years service: 15-20 months
- 20+ years service: 18-24 months
Add time for age (over 40), senior positions, and specialized roles. Reduce slightly if you’re young and easily employable.
Step 2: Calculate Your Severance Value
Multiply your notice period by your total monthly compensation:
Base Salary + Average Bonus + Benefits Value + RRSP Contributions = Total Monthly Compensation
Example: $80,000 salary + $8,000 annual bonus + $500/month benefits + $400/month RRSP = $7,900 monthly compensation
For 12 months notice: $7,900 × 12 = $94,800 total severance entitlement
Step 3: Compare to TD's Offer
If TD offers $40,000 but your calculation shows $94,800, you have significant room for negotiation.
How to Apply for Your Full Severance Entitlements
Step 1: Don't Sign Anything Immediately
TD will generally ask you to sign a release in exchange for the severance package. It is important that you get advice on the package before you sign anything.
Tell HR you need time to review the offer with legal counsel. You’re entitled to reasonable time for consideration.
Step 2: Document Everything
Gather all documents including:
- Your original offer letter and employment contract
- Recent performance reviews
- Salary history and bonus records
- Benefits information
- Any written communications about your termination
Step 3: Calculate Your True Entitlement
Use the framework above or consult with an employment lawyer who can provide a precise assessment based on your specific circumstances.
Step 4: Prepare Your Negotiation
Write a formal response to TD outlining:
- Why you believe the offer is inadequate
- Your calculation of appropriate severance
- Specific items for negotiation (extended benefits, RRSP continuation, etc.)
- Your willingness to negotiate in good faith
Step 5: Engage Legal Representation if Needed
Most employment lawyers offer free consultations and work on contingency for severance negotiations. If TD’s offer seems unreasonably low, legal representation often pays for itself through increased severance.
Common Mistakes to Avoid
Accepting the first offer – Banks expect negotiation. Employees who negotiate typically receive 30-50% more.
Signing under pressure – You’re entitled to reasonable time for consideration, regardless of what HR suggests.
Not consulting a lawyer – Most work on contingency, so legal help often costs nothing if your package doesn’t increase.
Believing HR works for you – HR protects TD’s interests, not yours.
Focusing only on lump sum – Extended benefits and RRSP continuation add significant value beyond base payment.
What If TD Refuses Fair Severance?
Escalate Internally
Sometimes senior management has more authority to offer reasonable packages than HR.
Legal Demand Letter
A lawyer’s formal demand often prompts reconsideration. Banks want to avoid litigation costs.
Litigation
If necessary, you can sue for wrongful dismissal. Most cases settle before trial for amounts much closer to full entitlements.
Timeline and Next Steps
Immediately: Don’t sign anything. Request time to review.
Within 1 week: Consult with an employment lawyer (free consultation).
Within 2-4 weeks: Negotiate through your lawyer or respond with a counter-offer.
Within 4 weeks: Apply for Employment Insurance regardless of severance negotiations.
Key Takeaways
TD’s initial severance offers rarely represent full legal entitlements. Most employees can negotiate significantly better packages.
Don’t let pressure tactics force you into accepting inadequate severance. Take time to understand your rights.
Your years of service deserve recognition. Don’t settle for statutory minimums when you’re entitled to much more under common law.
Employment lawyers typically work on contingency for severance negotiations, so getting legal advice often costs nothing if your package doesn’t improve.
Remember: You have more leverage than you think. TD doesn’t want costly litigation or negative publicity. Fair severance is almost always negotiable.
