Severance Pay
Severance pay is compensation you receive in place of proper notice of termination
Gain a better understanding of the details of a severance package and your entitlements.
What is a severance package?
A severance package, also known by various labels such as termination pay, pay in lieu of notice, exit package, or layoff package, ultimately refers to the same concept: severance pay.
If you are an employee who has been dismissed without cause, your employer is required to provide you with the proper advanced warning, known as notice. A severance package is the pay your employer provides you in place of proper notice or advanced warning.
Are you entitled to a severance package?
Under Ontario employment law, unless you are dismissed for just cause, you are entitled to a fair severance package. Your employer will typically provide you with a written termination letter outlining the severance package they are prepared to offer, in exchange for a signed release. Your employer may claim that there is an enforceable severance provision in your employment contract that limits your entitlement to severance. These provisions are often not enforceable. This means you may be entitled to more severance pay than what is initially offered.
If your former employer alleges just cause to terminate your employment without severance pay, the high standard of proof required to support this claim is rarely met. Often in cases where just cause is alleged, many terminated employees may still be entitled to severance pay, despite their employer’s claim.
Calculating severance pay can be complex. Understanding your rights, and how to properly calculate severance pay is crucial to securing a fair settlement that provides you with what you are rightfully owed. Correctly assessing and calculating severance pay is part of how an experienced severance pay lawyer can help you.
What is termination without cause?
You do not have the right to continued employment in Canada. In other words, you can be fired from your job at any time and for almost any reason, as long as your employer provides you with the proper advanced warning or payment, known as severance.
However, there are several rules regarding how to properly terminate and compensate you once you have been dismissed without cause.
- Wrongful dismissal laws protect you from inadequate notice or severance.
- Constructive dismissal laws protect you from fundamental changes to your job position or compensation.
- Human Rights laws protect you from discrimination during employment and at time of dismissal.
- Statutory laws (like the Employment Standards Act) protect you from terminations that do not respect the legislated minimums.
What is reasonable notice of termination?
In Canada, employers are required to provide you with a reasonable notice of termination. In other words, your employer must provide you with advance working notice of a defined termination date. During your notice period, all your working conditions must remain constant. For example, your employer cannot demote you or decrease your pay during your reasonable notice period. Failing to provide you with these rights is a form of wrongful dismissal.
Your employer can also provide you with payment in place of a reasonable notice of termination, which is known as severance pay.
What is the difference between reasonable notice and notice of termination?
The concept of “notice of termination” as required by the Employment Standards Act, provides only a minimum amount of notice that an employer must provide you. But you may be entitled to significantly more than statutory notice.
In addition to notice of termination, you may also be entitled to reasonable notice or payment in lieu of this notice. The length of a reasonable notice period is determined by characteristics such as age, tenure, position, salary, and re-employability.
Why do you need a severance package lawyer?
It is not uncommon for employers to offer severance packages that are not fair and reasonable. Employers usually offer lowball severance packages on the assumption that you will be happy to get anything, or that you will sign a release without knowing your rights. This is why it is vital that you speak to an experienced Toronto employment lawyer to review your severance package before accepting your employer’s initial offer.
An experienced employment lawyer will consider how to best deal with the circumstances of your case, such as how to set aside any restrictive severance provisions in your employment contract, or the right strategy to deal with a just cause termination.
Our severance pay lawyers have exceptional experience in handling severance package cases, having represented countless clients who were dismissed improperly or not offered fair severance packages.
We have dealt with some of the largest organizations in Canada. We will explain your options and protect your legal rights. Our skills, experience, and reputation are widely recognized by clients and peers, making us one of the most recommended labour and employment law firms in the GTA.
When they think they hold all the cards, show them you have more power than they think. Let the severance pay lawyers at Whitten & Lublin protect your employment rights and help you get the severance you are entitled to.
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