Can I Get Severance Pay If I Quit My Job?

How does quitting your job impact entitlements to employment insurance (EI) and severance pay?

During the “Great Resignation”, employees became more mobile than ever. Workers are more willing to change employers and there is less of a premium placed on loyalty. Rare are the employees who will work for one employer their whole lives nowadays.

But should you choose to quit your job, how does that affect your entitlements to employment insurance (EI) and severance pay?

As always, it depends on your circumstances. At first blush, you lose entitlements to both if you resign yourself. Unemployment insurance and severance pay are meant to bridge you through to your next job after an often-unexpected dismissal. If an employee is quitting on their own accord, then they are generally thought to have the ability to plan ahead (bridging that gap in employment income themselves, so to speak).

What are examples of situations where quitting could still entitle you to EI benefits?

But there are situations where you could quit and have it considered a constructive dismissal, where you are owed severance. One example is if there are material unilateral changes to your employment relationship, such as an over-15% reduction in compensation or a demotion in responsibility.

If an employee does not object to such changes quickly however, they may be found to have condoned the change, which would extinguish any constructive dismissal claim.

Constructive dismissal can also be invoked if the workplace has become so toxic such that a reasonable person could not return to work there.

EI works similarly, where you will only receive benefits upon quitting if you had no other reasonable choice.  Unilateral material changes to the employment agreement and discrimination in the workplace would be two examples that could meet that threshold for receiving EI benefits.

How can an employment lawyer help maximize entitlements when resigning?

It can be risky to leave immediately and try to muster an argument for constructive dismissal after.  An experienced employment lawyer can assess your situation and help you maximize your chances of qualifying for entitlements when you do eventually resign.  If you would like more information about how Whitten & Lublin can help you navigate quitting your job, please contact us online or by phone at (416) 640-2667 today.