Employee Rights When a Company Closes

Are employees owed severance pay when a company goes out of business?

Employees are owed severance pay when any company goes out of business, so long as that company does not go into bankruptcy or receivership.

How is severance pay calculated?

Severance pay is based on the individual’s specific circumstances. These factors include their age, length of service, ability to secure re-employment and the nature of their position. Use the Pocket Employment Lawyer to find out what your rights are.

Use the Severance Pay Calculator to determine the amount of severance pay you are owed upon termination.

Do you have to accept a severance offer right away?

You don’t have to accept a severance offer on the spot. You have the opportunity to leave with that offer, and consider your options. You also have the right to seek independent legal advice from an employment lawyer, to ensure that the severance package is fair.

Can my employer give me working notice?

A company can provide you with a notice of termination, or notice period, in one of three ways.

The first is called pay in lieu of notice, which is more commonly referred to as severance pay. Your employer will terminate your employment at that moment, and then provide you with a severance package.

The second option is working notice. This is a period of time where you continue working for your employer until the date of termination.

The third option is a combination of both pay in lieu of notice and working notice.

If you receive working notice, the period of time that you are working for the company counts towards your overall notice period. For example, say you are entitled to eight weeks of notice upon termination. If your employer gives you four weeks of working notice, you would only receive pay in lieu of notice (severance pay) for the additional balance of four weeks.

Do I need to speak to an employment lawyer?

You should always contact an employment lawyer at Samfiru Tumarkin LLP as soon as possible to preserve your legal entitlements. You need to ensure that your rights are protected. Talk to Canada’s most positively reviewed employment law firm to get the advice you need, the compensation you deserve.