Typically, all non-unionized employees that are dismissed without cause are entitled to notice of their termination or pay in place of notice, known as severance. If you have been dismissed your employer may try to limit your severance pay in Canada through a written employment contract or offer letter.
The employer can limit your entitlements to the Employment Standards Act (the “ESA”) minimums if you are a provincially regulated or the Canada Labour Code’s minimums if you are a federally regulated.
Most employment relationships are provincially regulated and the ESA minimums can be as low as one week per year of service up to a maximum of eight (8) weeks. An additional week per year of service is possible up to a maximum of twenty-six (26) weeks if you have been with the organization for at least five (5) years and the employer has a payroll of at least $2.5 million in Ontario.
Despite the above, it is important to know that employers, including the largest and most sophisticated, often do not properly limit their employees’ entitlements to the minimums despite what might seem like appropriate language in the contract. In fact, they often get the language or procedure for limiting severance wrong. As a result, if you are terminated you may be entitled to months of severance pay above the ESA minimums. Factors such as your age, length of service, the job you performed, comparable cases and your total compensation will impact the amount of severance you are entitled to.
Our Severance Calculator can assist you in determining an estimate for your severance, but it does not replace the need to speak with a lawyer directly. A lawyer from the Whitten & Lublin team will assess your contract’s enforceability and apply the factors a judge uses to determine a fair amount of severance.
Author: Paul Macchione, Whitten & Lublin