Fewer employers offering severance to laid-off workers, survey reveals

A recent survey revealed that a growing number of employers aren’t offering severance packages to laid-off workers.

According to Randstad RiseSmart’s 2023 Global Severance Research, only 42 per cent of respondents provided severance pay this year — down from 64 per cent in 2021.

Which employers are the least likely to offer severance to laid-off workers?

The survey, which involved more than 400 companies around the world, found that U.S. employers were the least likely to offer severance pay, with many doing the “bare minimum when it comes to supporting employees exiting the business.”

In a news release on the findings, Lindsay Witcher, global managing director of Randstad RiseSmart, warned companies that being stingy on severance can create a number of problems.

“[If] layoffs must be made, the way severance packages are constructed and the manner in which they are conducted are critical to keeping remaining employees engaged and protecting your employer brand reputation, not to mention doing the right thing by your departing employees.”

What are companies planning to do in 2024?

Four in 10 employers told Randstad RiseSmart that they are determined to offer “redeployment options” over the next year.

This would give staff whose position is at risk of being eliminated a chance to find an alternate role within the company.

SEE ALSO
• ‘Loud Layoffs’: What employees need to know
• What Canadians need to know about ‘quiet layoffs’
• Solera accused of conducting mass layoff via Microsoft Teams

Severance pay in Canada

In Canada, non-unionized employees are owed full severance pay when they are fired without cause or let go.

This includes individuals working full-time, part-time, and hourly in Ontario, Alberta, or B.C.

Severance can be as much as 24 months’ pay, depending on a variety of factors.

WATCH: Employment lawyer Lior Samfiru explains everything you need to know about severance packages on an episode of the Employment Law Show.

Even if you are terminated for cause, it’s very likely that you are still entitled to full severance pay because non-unionized employees often don’t meet the conditions necessary for this type of dismissal.

Regardless of a company’s grasp on employment law, they are legally required to provide proper compensation following a termination.

This concept applies during challenging economic conditions, downsizing, the closure of a business, or major public health events such as the COVID-19 pandemic.

LEARN MORE
• Severance for provincially regulated employees
• Rights to severance for federally regulated workers
• Severance packages during mass layoffs

Does working notice affect my severance entitlements?

The short answer is yes. If a non-unionized employee in Canada receives working notice, it will affect how much severance pay they are owed when the employment relationship ends.

• Example: You are entitled to eight months of severance pay if you are fired or let go immediately. One day, your employer gives you four months of working notice. When the working notice period ends, the company will owe you four months of severance instead of eight months.

Similar to calculating severance pay, the length of the working notice period is determined using various factors, including position, salary, how long you have worked for the company, and your ability to find similar employment.

If you believe that your employer didn’t provide you with the correct amount of working notice or severance, contact an experienced employment lawyer at Samfiru Tumarkin LLP.

We can determine if you have been wrongfully dismissed and help you secure the compensation you are owed.

SEE ALSO
• Severance Pay Calculator: Determine your entitlements
• Employment Law Show: Things to never do before seeking legal counsel
• Employment Law Show: Situations that trigger legal disputes

My boss is pressuring me to sign my severance offer immediately, what should I do?

It’s not uncommon for employers in Canada to pressure non-unionized workers to immediately accept severance offers that provide them with far less compensation than they deserve.

If you receive an offer from your boss, don’t sign anything before contacting our firm.

The company can’t legally force you to accept it before leaving a termination meeting or even a few days after it was provided to you.

In some cases, employers try to add:

• A termination clause that limits the amount of severance pay you can receive
• Non-compete clauses that prevent you from being able to pursue employment elsewhere in your industry

As long as you didn’t accept the offer and return it to your boss, you have two years from the date of your dismissal to pursue full severance pay.

SEE ALSO
• I already accepted a severance package, what should I do?
• ’60 days or more’: Is it an enforceable termination clause?
• Employment Law Show: 5 facts about employment contracts

My boss offered me an alternate role, can I still get severance if I decline it?

If your employer offers you an alternate role with the company, and you have a good reason for rejecting it (i.e. reduced pay or unfavourable conditions in the contract), you can still receive full severance pay.

• Example: Emily is a manager at a grocery store. One day, she receives a phone call from her employer — informing her that they are getting rid of her full-time position. Instead of letting Emily go, the company offers her a job as a part-time cashier. Since this is a substantial change to the terms of her employment, she is able to decline the offer and receive full severance pay.

Even without a good reason for refusing your employer’s offer, you can still pursue your minimum entitlements at the end of your employment.

ADDITIONAL RESOURCES
• Changes to your job in Ontario: What employees need to know
• What Albertans need to know about changes to their job
• Changes to your employment in B.C.: Employee rights

My boss is pressuring me to quit after refusing the alternate role they offered, what should I do?

No matter how upset your employer is that you rejected the alternate role they offered, the company can’t pressure or force you to resign.

If your boss is encouraging you to step down, document their attempts. Keep any letters, emails, or text messages that show how the company is pressuring you to quit your job.

Once you have gathered all of the relevant documents, don’t resign before contacting an experienced employment lawyer at Samfiru Tumarkin LLP.

We can tell you if you have grounds for constructive dismissal claim, which would allow you to quit your job and pursue full severance pay.

Already resigned?

If you were forced to quit your job for any reason, reach out to our firm as soon as possible.

In addition to severance pay, you could be owed compensation for any damages associated with the end of your employment.

LEARN MORE
• Employment Law Show: Facts about forced resignations
• Employment Law Show: What your employer legally can’t do
• Employment Law Show: Situations that trigger legal disputes

Lost your job? Speak with an employment lawyer

If you are fired or let go for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP.

Our lawyers in Ontario, Alberta, and B.C. have helped tens of thousands of non-unionized individuals resolve their workplace issues.

We can review your situation, enforce your rights, and ensure that you receive the compensation you are owed.