Key Factors that Influence Severance Pay: Lior Samfiru on Newstalk 580 CFRA

Interview Summary

As details of former Prime Minister Justin Trudeau’s severance package were revealed, questions about factors that influence severance pay have arisen. What can employees expect in terms of compensation if they are let go? Is there a specific calculation for severance pay?

Lior Samfiru, an Ontario employment lawyer and Co-founding Partner at Samfiru Tumarkin LLP, joined Newstalk 580 CFRA’s Bill Carroll to discuss employee severance packages.

Interview Notes

• Mistakes employees make: Samfiru explained that employees who have been let go by their employers are rarely offered adequate severance packages. ‘Employers pay the odds, and figure if they let 10 people go, 7 out of the 10 will accept the initial offer,” Samfiru noted. “Someone who was owed 12 months could be offered 4 months of severance pay.”
• Reacting badly to the termination: “We’re going to be negotiating with your employer. You don’t want to make that process more difficult than it needs to be,” Samfiru explained. “In some situations, people have deleted things off of work computers, posted defamatory statements, etc,” Samfiru stated that this type of behaviour can result in legal action taken against the employee.
• Accepting a severance package immediately: Samfiru stated that employees’ legal rights do not expire right away, and do so 2 years after the date of termination. “This is a pressure tactic. A lot of employees in their state of mind will accept the offer, thinking they have no choice.”
• Termination clause included in contracts: “Employers are trying to minimize their future severance obligations. The only way to do that is to have a proper termination clause in a contract,” Samfiru explained. “Our courts have said that the termination clause must be drafted in a very particular way to be enforceable.”
• Terminated ‘for cause’: Samfiru commented that employees must consider what a termination ‘for cause’ is. “It is reserved for the worst offenders,” said Samfiru. “Too often, employers equate misconduct ‘for cause’. In most cases, employers pull the trigger for terminations for cause too soon.”

Related Resources

For further insights and discussions related to employee rights and the gig economy, explore the following resources:

• Severance pay in Ontario
• Layoffs in Canada