“While on ‘termination notice,’ if I leave my company for a new job, before my last scheduled day of employment, will I still get severance?”

Question: Alan, I’ve been working for 7 years with a company that has been hit hard by the economy, and has been downsizing. I’ve been given a “working notice” of six months before my job is over, and then I am entitled to 7 weeks of severance.

If I find a job at 4 months, for example (or after 5 months and 20 days, as another example) am I still entitled to the severance package, or do I have to wait until the termination date? Thanks.

Oshawa, Ontario

Answer: Your question is so valuable, because it is so common.

Your rights to severance – if any – are set forth in your severance agreement. If they are not there, they don’t exist. If you have received your severance agreement, read it carefully. If it does not clearly say you can leave during the “notice period,” yet collect severance, you must presume that you must work until that very last day of the “notice period” in order to be entitled to severance; if you leave a day before, you are not entitled to any severance.

If you have not yet received your severance agreement, ask Human Resources to see a copy, and read it carefully.

In my experience, about 1/3 of severance agreements permit employees in your circumstance to leave early and take the severance with them, while about 2/3 say the opposite: leave early and you lose all rights to severance.

The employers’ reasoning for this is that “If they did not suffer any time without a paycheck, severance is not appropriate; it is not intended as a reward, and surely should not result in a windfall, but rather is meant only as assistance during an unpaid period.”

The employees’ responsive reasoning is this: “If I lose out on severance by taking a job beforehand, it forces me to ‘gamble’ between the advantage of a temporary, possibly lower-paying job, or the loss of severance if I take it.”

I am a bit of a cynic: I believe many employers structure their “notice periods” and severance so that most people will try to find new jobs, leave before the “notice period” is up, and thus save the company a lot of money.

If your severance agreement is silent on the issue, or if you can’t get a copy of the agreement, don’t despair. You can always address the issue in a respectful question sent by email to senior-most management, requesting clarification. One warning, though: the clarification must be written into the severance agreement itself, because almost every severance agreement says, in effect, “If it is not in this agreement, it does not count,” which is what I said in the first paragraph, above.

Thanks for writing in. I hope you’re enjoying our Blog. It would be very helpful to me – and to our Blog readers – if you would get in touch with us later, and tell us what happened on this issue.

Until then, best of health and happiness this new year.

Best, Al Sklover

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