Severances are payment in lieu of a notice period of one’s employment ending. Severances or a notice period are required by law as a means to assist an employee to transition into comparable alternative employment. As such, the length of the notice period will vary in accordance with how long it is estimated an employee will need to find a comparable job based upon certain factors. Typically, factors that most affect a severance amount include the employee’s length of service, the employee’s age, and position/duties. A factor that is typically overlooked, however, is the state of the economy. This, thus, raises the question of if an employee is entitled to an increased severance during the COVID-19.
The COVID-19 pandemic has created great strain on the economy, and as a result, there are fewer jobs available relative to job seekers. In other words, the unemployment rate has increased significantly in a short period of time. Losing your employment during this time will undoubtedly make one’s job search more difficult and lengthy.
At Whitten and Lublin, our team has been researching comparable market outcomes and the court’s willingness to award higher severance payments during tough economic times. Generally, past cases have awarded larger severances during the SARS outbreak and during economic slowdowns such as in 2008, which indicates the possibility of increased severance during the COVID-19 as well.
In the past, the courts have been favourable to employees in industry-specific occupations that have been most affected, such as travel and tourism during the SARS outbreak (see Valdivia v. Lony G Inc.,  O.J. No. 5207 and Hatch-Stewart v. St. Catharines Museum, 2008). Given the magnitude of the COVID-19 impact on the economy overall, it is anticipated that the courts will award higher severance during the COVID-19, irrespective of the industry, but even more so for employees in industries that have been hit the hardest.
Employees must be aware of the impact COVID-19 plays on a fair severance and seek the advice of an employment lawyer. This will ensure that you receive a fair severance and also aid in getting through the tough economic times due to the global pandemic. The poor state of the economy will increase the amount of severance you are owed which employers are not readily willing to pay.
With years of experience in this ever-changing area of law, we at Whitten & Lublin are happy to provide insight and advice into your specific work situation. If you’re looking for employment lawyers and would like more information about what Whitten & Lublin can do for you, please contact us online or by phone at (416) 640-2667 today.
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