Dismissal of long-term employees is never easy. Usually, it will go one of three ways:
- Employers will find a reason to fire you “with cause” and no severance will be paid;
- No cause is found and a severance package must be paid out;
- The company tries to get away with paying only the bare minimum.
Unfortunately, companies try to fit employees into the third category, but things may change after a recent ruling in Ontario. Here is a brief summary of Daniel Lublin’s take on the decision, that you can read about in the Metro *here*.
Luis Romero Olguin spent 24 years of his life working for Canac Kitchens before he was laid off during a downsizing. Many corporations make a practice of doling out the minimum requirements for severance and benefits, and Canac was no exception. Mr. Lublin says that this is “possibly the biggest loophole in workplace law”. For Olguin, this meant that he was on his own when he was later diagnosed with throat cancer.
The judge was unimpressed by Canac’s “hardball approach” and ruled that Olguin was entitled to have his benefits and pay for a reasonable amount of time, rather than the “bare minimum”. Surprisingly, the judge also awarded him punitive damages, which are typically reserved for cases in which the employer has behaved so poorly that they deserve a slap on the wrist. Technically, Canac did nothing illegal, so this case sends a strong signal to employers that they are no longer safe in following the letter of the law. Employers now have more incentive to offer greater severance packages in order to avoid potentially large legal costs. Whether or not this precedent will have a conventional effect or result in changes to the Employment Standards Act waits to be seen.
If you are curious about what your severance might look like, consider contacting Whitten & Lublin for an assessment. It couldn’t hurt to know what you deserve before being told what you are worth.