Severance Pay for CIBC Employees

CIBC Severance Packages

The Canadian Imperial Bank of Commerce (CIBC) is laying off a number of staff in an ongoing move to trim its spending and increase efficiency.

Chief executive Victor Dodig told staff in a memo that they have made “good” progress in “transforming” the bank. The Canadian Press reports that the document also says that the bank needs to keep a “careful eye on costs.”

Dodig says that the bank’s efficiency ratio is still too high, and needs to drop further to improve results. CIBC will continue to search for “opportunities to simplify our bank and work differently.”

As a result, some employees will be let go from the bank over the next few months. CIBC will not comment on the number of employees that the layoff will affect.

Layoffs at CIBC

• November 2023: CIBC has confirmed that it has cut nearly 2,400 jobs, representing about 5% of its full-time workforce, over the past year.

Termination Rights for CIBC Employees

Are you an outgoing employee of CIBC, or another major bank in Canada? Continue reading to learn about severance pay for CIBC employees and their rights to a severance package. Samfiru Tumarkin LLP routinely represents former employees of the bank with termination and severance negotiations. Our clients range from customer service representatives to bank executives.

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Canada Labour Code

Most bank workers are federally regulated employees and governed by the Canada Labour Code (CLC). The CLC identifies minimum standards to which businesses must adhere, including termination of employment, minimum wage, hours of work, public holidays for workers, and parental leave.

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Statutory (Minimum) Entitlements

The CLC provides CIBC workers with minimum severance entitlements upon termination. Employees dismissed by the bank are entitled to the following:

• 2 weeks of advance notice of termination or, alternatively, 2 weeks’ pay in lieu of that notice, if the employee has finished at least 3 months of continuous employment (and have not be dismissed for cause); and
• An additional 5 days of pay or 2 days of pay for each completed year of employment, whichever of these two amounts is greater (If the employee has at least 12 continuous months of employment).

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Full Severance Pay for CIBC Employees

There is a belief that severance pay comprises a few days, a week or two weeks for every year of service an employee has with the company. While that formula does hold true when determining an individual’s MINIMUM severance pay amounts, it is not an accurate explanation as to how severance pay is calculated.

When a bank fires a federally regulated employee without cause, the employee can pursue a full severance package, also known as common law severance.

How to properly calculate severance pay

Full severance for CIBC employees in Ontario, British Columbia or Alberta is calculated by looking at numerous factors. These factors include, but are not limited to:

• Employee’s age
• Length of service with the bank
• Position
• Salary
• Ability to find new employment

A common law severance package can be as much as 24 months’ pay. Use this helpful severance pay calculator to determine your severance pay range.

Common law severance can be provided by the employer as working notice, severance pay in lieu of notice, or a combination of both.

Wrongful Dismissal for CIBC Employees

Banks, including CIBC, rely on the fact that most of their employees are unaware of their true employment rights. Employees will often be provided severance packages that fail to take into account their full severance entitlements. When an employer does not provide the appropriate common law package, the termination becomes a wrongful dismissal.

RESOURCES
• Severance pay in Ontario
• Bonuses and severance pay
• Wrongful dismissal in Ontario

Deadlines on severance offers

A common myth suggests that when a bank, such as CIBC, fires an employee, the employee must accept a severance offer within a matter of days. If that severance offer deadline passes, that person’s right to severance pay expires. That is simply not true. An individual in Ontario, BC or Alberta has up to two years from the moment of termination to pursue their full common law severance package.

Severance packages for part-time employees

Part-time employees at CIBC are owed severance packages when they lose their job. Compensation for these individuals is calculated using the same factors that apply to full-time employees (age, length of service, etc.).

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Severance pay for CIBC contractors

Individuals who have been classified as contractors or independent contractors by CIBC may be owed full severance pay when the bank terminates the employment relationship.

Many contractors are actually employees in the eyes of the law, based on numerous criteria established over years of legal framework. Employment contracts and mutual agreements between an employer and employee cannot override an individual’s true relationship with a company.

If your contract with CIBC has been ended, contact our team to find out if you are actually an employee, and how much termination pay you may be entitled to.

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Temporary Layoffs

CIBC employees placed on a temporary layoff should be aware that they do not necessarily have to accept the layoff.

Temporary layoffs are illegal. An employer cannot place an employee on a temporary layoff, unless they have specifically and thoroughly addressed the concept of a layoff in an employment contract, or it is an established industry practice. Employees who have previously submitted to layoffs with the employer may be deemed to have forfeited their right to take action against the pause in employment.

An employee can treat the temporary layoff as a constructive dismissal, and depart their employment with a severance package.

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Unjust Dismissal

The CLC governs many aspects of employment, including dismissal from employment. In the right circumstances, it can be contrary to the CLC for a CIBC employee to be fired without “just cause”. When this happens, the employee has the option of filing a complaint of unjust dismissal under the CLC.

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This was established by a Supreme Court of Canada (SCC) decision, Wilson v. Atomic Energy of Canada, on July 14, 2016, which held that the “unjust dismissal” provisions of the CLC do not permit dismissals “without cause,” even if the employer provides severance. Similar to unionized employers, a federally-regulated employee can only be dismissed for just cause.

A CIBC employee may be eligible to respond to a termination without proper cause through ONE of TWO options:

• Pursue a full severance package under common law (up to 24 months’ pay) with assistance from an employment lawyer; or
• File a complaint of unjust dismissal under the CLC, and receive either statutory entitlements or reinstatement to their position with back pay.

To be eligible to file a complaint of unjust dismissal:

• You must not be employed as a manager;
• You have been employed for more than 12 consecutive months;
• You are not represented by a union; and
• You have not been laid off due to lack of work or discontinuance of your position.

A CIBC employee who wishes to pursue an unjust dismissal must file their complaint within 90 days of their termination from employment. The worker may have the right to request written reasons for their dismissal and their employer must respond within 15 days.

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Dismissed for Just Cause

A federally-regulated employer, like CIBC, can only let employees go in very specific situations, for example, for egregious misconduct (e.g., theft or fraud) or for lesser misconduct or poor job performance that persists despite proper correction action being taken to try to improve the bad behaviour or performance.

This is considered a termination “for cause”.

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Your next step if you lose your job at CIBC

If you are a CIBC employee, and have been fired or let go, with or without cause, you should explore all of your options to ensure that you make the best possible decision. Contact us immediately before accepting a severance offer from the bank or filing a CLC complaint.

It is critical that you get sound legal advice from experienced employment lawyers before making any decisions.

Call our team at 1-855-821-5900 to get the advice you need, and the compensation you deserve.

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