Do You Receive Severance Pay After a PIP?
What is a Performance Improvement Plan (PIP)?
Getting put on a Performance Improvement Plan, often referred to as a “PIP” but which sometimes goes by other names, is a dreaded fear of many employees. It means you are being put on notice for under performance and you are given a plan to try and meet expectations at work. Generally, termination is one of the potential eventualities if you do not improve enough. But does being put on a PIP automatically affect your severance pay entitlements? In other words, do you receive severance pay after a PIP, if you are terminated?
Firstly, ‘severance’ as it is colloquially used refers to your entitlements upon termination without cause. Your employer is required to provide you with proper advanced warning, known as notice. Severance is the pay your employer provides you in place of proper notice or advanced warning. While employment standards legislation like the Employment Standards Act, 2000 and the Canada Labour Code set minimums for these entitlements, employees are by default owed reasonable notice at common law, which almost always eclipses these statutory minimums.
How Does Common Law Impact Severance Pay Entitlements?
Under common law, reasonable notice is calculated by reference to factors such as age, position, tenure, and salary. It goes up to an unofficial ceiling of 24 months, but in exceptional cases, can even crack that barrier. Termination clauses in employment contracts that seek to limit these entitlements are often illegal and unenforceable, and an expert employment lawyer can help you determine this.
However, it changes if you are let go for cause. You forfeit any entitlements to common law reasonable notice. If you are provincially regulated, then you are still entitled to statutory minimums unless you engage in wilful misconduct that is not trivial and that has not been condoned by the employer. Federally regulated employees, though, also lose their statutory entitlements upon termination for cause. That being said, just cause is considered the ‘capital punishment’ of employment law and can be very difficult for the employer to prove.
Do you receive severance pay after a PIP?
It is important not to assume PIPs and just cause go hand in hand. An employee can be put on a PIP but still terminated without cause. At the same time, an employee can never see a PIP but still terminated for cause. Whether it impacts your entitlements depends on your specific case.
PIPs are often used as paper trails to provide justification for any cause argument. It can be used to demonstrate that you had a history of underperformance, you were given ample opportunity to improve and still failed to meet required and enumerated targets. Even with a PIP, however, terminating for cause can be an uphill battle. All sorts of questions can be raised. Was the PIP issued in good faith? Was the employee given a genuine chance to improve? Was the PIP a smokescreen for other, more malicious reasons for termination such as discrimination or reprisal? There are many cases where a PIP is insufficient to prove cause for termination.
Getting a PIP can be extremely stressful. Not only are you worried about keeping your current job, but now you might have anxiety regarding whether you will get any severance if you are terminated.
How Can an Employment Lawyer Help You in a PIP Situation?
Always remember that a PIP is not the be-all and end-all of a termination for cause. An experienced employment lawyer can help you assess the strength and relevance of your PIP and help you realize your entitlements upon termination. If you need to discuss your workplace PIP, please contact Whitten & Lublin online or by phone at (416) 640-2667 today.
Author – Sohrab Naderi