Being terminated from work is a stressful experience for anybody. Emotions run high as you have to figure out your next steps, and money is obviously a primary concern. Your rights to severance pay and termination pay will depend on the circumstances of your termination.
The first thing you should do, before signing anything, is contact a lawyer to review the severance package that your employer has offered you. An experienced employment lawyer can tell you if you are receiving all of the entitlements owed to you under the law, and give advice on how to maximize your severance package. Sadly, many employees walk away with less severance than they are owed.
Please note that “severance package” and “severance pay” refer to different things. The term severance package is generally used to describe the total payout that a terminated employee will receive. Severance pay, on the other hand, is a term in the Employment Standards Act. It compensates employees for losses (like loss of seniority) that happen when a long-term employee is fired. In order to qualify for severance pay an employer must have worked for the employer for at least five years and the employer must either have a payroll of $2.5 million or have severed 50+ employees in a six-month period as a result of a business closure.
There are two main scenarios in which Ontarians are terminated; with cause and without cause.
Terminated With Cause
It is a high bar to terminate someone with cause in Canada. Generally, there must be some serious misconduct that harms the employment relationship, such as theft, violence, fraud rising to the level of gross misconduct. The reason for the high bar is that in the event of willful misconduct, an employee will not receive any termination or severance pay. If you are an employee who has been fired for cause, you should absolutely reach out to a lawyer to review the circumstances of your dismissal. You may have a case for wrongful dismissal.
Terminated Without Cause
In Ontario, you can be terminated without cause, so long as your employer provides the appropriate amount of “notice” or “pay in lieu of notice”. The Employment Standards Act sets out minimum entitlements that a terminated employee receives. This is based on the length of service. However, employers are only allowed to provide this minimum amount if they included an enforceable termination provision in your employment contract. This is actually quite tricky for employers. The provision must be explicit, unequivocal and a valid term of the employment agreement. Even technical violations of the Employment Standards Act may render the provision void.
If that happens, or if there is no termination provision at all, the employee is actually entitled to common law reasonable notice. This is usually a much higher amount than the minimums set out in the Employment Standards Act.
When the court determines common law reasonable notice, they will consider such factors as the length of employment, the employee’s position, the reason for dismissal, the employee’s compensation and whether the employer acted fairly and in good faith. These are several examples. The maximum notice period available is typically 24 months, though there are always exceptions for egregious behavior.
Please note that all of these factors would be weighed and the particular circumstances of each case need to be examined to determine the appropriate amount of reasonable notice.
Contact the legal professionals at Ball Professional Corporation for assistance to make sure you receive any entitlements owed to you upon termination.