Understanding severance packages | Employment Law Show TV – S9 E03

Episode Summary

UNDERSTANDING SEVERANCE PACKAGES, contract renewals, staff let go due to new ownership and more on Season 9 Episode 03 of the Employment Law Show with employment lawyer Lior Samfiru, Partner at Samfiru Tumarkin LLP.

Watch above to discover your workplace rights and learn everything you need about employment law in Alberta, Ontario and British Columbia, on the only employment law show on both TV and radio in Canada.

Episode Notes

Severance if let go during probation

I accepted a management position with a new company. Two months into the new job, I was let go. I was told since I was on probation I was only going to be offered a few weeks’ of severance. Is it possible I’m owed more?

• Short-service severance rights: Many employees mistakenly believe that a termination of employment during probation leads to an automatic lack of severance. Probation periods are not automatic and must be agreed upon at the start of a new job. Short-service employees could be owed proportionately more severance pay than long-service employees as it will be difficult to find future employment.
  

Self-employed for a sole client

I believe I’m considered “self-employed,” but I’ve been doing IT work for a sole client for about 14 years. A few months ago, a new owner bought the company and now wants me to reduce my hours and resign when I turn 65. Do I have any legal options?

• Employee and contractor classifications: Often individuals are misclassified as contractors when they are employees. Misclassified employees miss out on vital employee rights, such as severance upon a termination of employment, or a constructive dismissal if a major change to their job is imposed.
  • Learn more about severance pay
    • Severance in Alberta
    • Severance packages in Ontario
    • Severance entitlements in B.C

Let go after repeated contract renewals

My wife has been in a contract position renewed several times, working part-time. Recently she was informed that they won’t be renewing her position. Is she owed any severance?

• Severance after a terminated contract: After a certain point, typically three or more contract renewals, employment law dictates that the practice has become meaningless. Despite continually being asked to sign contract renewals or extensions, the individuals would now be considered permanent employees.

Remote workers forced into the office

I’ve worked at this company for over 40 years, and in the last decade, I have never had to go into the office. I’m now being asked to sign a contract stating that the remote work arrangement could end at any time. Do I have to agree to this?

• Changes made to your job: Employers do not have the right to change the terms of employment, such as a remote work arrangement, without an employee’s consent. A major change can lead to constructive dismissal, and an employee can pursue their severance entitlements. Employees should be wary of allowing imposed changes to continue without voicing dissent. Silence can be considered acceptance.

Understanding severance packages

• Defining a severance package: Employers are legally obligated to provide terminated employees with a severance package. Severance pay is an amount of compensation intended to support individuals financially until other employment is secured.
  
• An employer’s offer: Employees are often owed much less severance pay than they are owed upon termination. Employers often are unaware of the specific factors that influence severance pay.
• Factors that influence severance:  The main factors that impact severance pay are the age of an employee, their position and length of employment. Other factors, such as whether or not an employee has a medical condition or a bad economy, can also influence severance pay.
• Agreeing to severance immediately: Employees should not sign a termination agreement or severance offer without seeking legal advice. Employers will often implement a deadline as a pressure tactic. Employees have up to two years after the date of termination to pursue their rights.
• Negotiating a package: It is not a complicated process to negotiate severance once legal representation is secured. It is vital to retain appropriate and efficient legal advice from an employment lawyer.

Ultimatum of a layoff or resignation

I was told to either accept a temporary layoff or take severance and leave. I’ve been with the company for just over 5 years, earning a salary of $85k per year. My title is Business Development Manager, and I’m 41 years old. What should I be offered?

• Accepting a temporary layoff: Employees do not have to accept a temporary layoff; instead, they can choose to treat the layoff as a termination of employment and pursue severance. Severance pay in lieu of a temporary layoff would still be based on an employee’s age, position and years of service.

The new owner lets go of current employees

I work at a manufacturing plant, and a new company is taking over. The plant has decided not to retain any employees from the previous owner. They’ve stated that we aren’t owed any severance pay. What are our rights here?

• Letting employees go in a mass layoff: In the event of a sale of a business, typically the seller of the business owes former employees severance pay. Employees hired by the new owner should ensure their previous years of employment are acknowledged.
  

Employment Rights

• Put on working notice: Employers can place employees on working notice. This notice period counts towards an employee’s severance payment.
• Asked for private medical information: An employer does not have the right to know or ask about an employee’s private medical information. Employers can request necessary accommodations as well as a prognosis.
  
• Choose to work for a competitor: Employees can choose to work for a competitor after resigning from their position. Employees should consider whether or not they signed a non-competition agreement before taking on a new position.
• Shift title and duties to a coworker: Employees can treat their employment as constructively dismissed if their title and duties are changed significantly by their employer.
• Revoke an approved vacation: Employers can only revoke an approved vacation if an employee has not yet spent money and relied on the approval.

PREVIOUS EPISODE: Employment Law Show S9 E02 – Fast facts about employment contracts