Severance for technology industry employees

The technology sector is a multitrillion-dollar industry comprised of skilled workers who provide a variety of products and services, including designing electronic devices and developing comprehensive software systems.

To date, the global technology industry is reportedly worth more than $5 trillion. The majority of the money is divided up between North America (35 per cent), Asia (32 per cent), and Europe (22 per cent).

In Canada, tech companies including Shopify have permanently transitioned staff from in-office work to remote work in response to the COVID-19 pandemic

Fired or lost your job in the technology industry?

In Canada, if you have been fired or lost your job, you have workplace rights, which includes the right to severance.

Many companies, including those in the tech sector, anticipate that their staff is largely unaware of their severance entitlements. In other cases, employers legitimately do not know what their obligations are to workers during the termination process.

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• Employment lawyer on mass layoffs in the tech industry
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• Layoffs in Canada (2024)

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

Severance pay for technology industry employees

In Canada, employees in the tech sector can get up to 24 months of severance pay when they are fired or laid off from their job. This includes individuals working full-time, part-time, and hourly in Ontario, Alberta, or B.C.

Severance is the compensation a non-unionized worker receives from their employer when they are fired without cause. If you are fired for cause, you are likely still entitled to full severance.

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

In Canada, all non-unionized employees are entitled to severance pay during the COVID-19 pandemic if they are terminated or let go from their job. A company doesn’t have the option of “suspending” their legal obligations due to the coronavirus outbreak.

ADDITIONAL RESOURCES
• Severance Pay in Ontario
• Alberta severance packages
• Understanding severance in B.C.

The employment lawyers at Samfiru Tumarkin LLP have represented numerous employees from the technology sector over the years in severance package negotiations. We have successfully secured much larger amounts for individuals employed across a variety of positions, ranging from entry-level jobs to executives.

How to properly calculate severance pay

Employers often incorrectly calculate severance pay. There is a belief that severance pay is one week’s pay, two weeks’ pay, or a week for every year of service an employee has with the company. While this formula may cover the minimum amount owed by a company as per provincial legislation, our legal system (common law) has determined that a full severance package should be higher (i.e. many months’ pay).

LEARN MORE
• Severance pay during a recession
• Does a deceased employee have a right to severance?

For non-unionized employees, the main factors of termination or severance pay include age, length of service, position, bonuses, benefits and the ability to find new work.

Our Severance Pay Calculator can help you determine your severance entitlements.

Don’t sign on the dotted line!

Do not accept any severance offer, termination papers or exit agreement that your company may provide you with. Once you sign back these documents, you eliminate your ability to negotiate a fair and proper severance package.

Wrongfully dismissed from the tech sector?

If you have lost your job, there is a chance that you have been wrongfully dismissed. A wrongful dismissal in Canada happens when you are fired or permanently laid off by your employer and are not given a proper severance package.

An employment lawyer at Samfiru Tumarkin LLP can analyze your situation and explain how much compensation you may be owed.

Changes to your job

Employees in the tech sector do not have to accept a significant change to their job. Large modifications, such as a demotion, cut in pay, reduction in hours, negative changes to commission, are illegal.

When the terms of your employment are significantly changed, the law allows you to resign from your job and seek full severance pay through a constructive dismissal claim.

LEARN MORE
• Changes to your employment in Ontario
• B.C. employees and changes to your job
• Can your employer change your job in Alberta

Temporary layoffs

Temporary layoffs occur when an employer significantly reduces or completely stops an employee’s employment. There is usually a mutual understanding from both sides that the employee will be called back to work, to the same position, after a reasonable period of time.

It is important for employees in the tech sector to understand that temporary layoffs are considered illegal, unless you agree to the layoff or it is addressed in your employment contract. You have the option to wait to be called back, or can treat this as a termination through a constructive dismissal and pursue severance.

Harassment

If you work in the tech sector, you don’t have to tolerate any form of harassment in the workplace, from either coworkers or managers.

Employers must investigate and respond appropriately to allegations of harassment and abuse.

If your company is creating, or allows for the creation of, a hostile or toxic work environment, this could be grounds for a constructive dismissal.

Contact an employment lawyer at Samfiru Tumarkin to explore your rights.

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Independent contractor? Think again

If you were hired as an independent contractor, there is a significant chance that you should actually be considered an employee. Employers may misclassify employees as contractors to avoid acknowledging certain employment rights like minimum wage, vacation and overtime pay, and severance when the individual is fired.

Companies, including those in the tech sector, cannot avoid the issue by having staff sign an employment contract, which indicates that they are a contractor rather than an employee.

Our legal system provides guidelines for determining whether someone is a contractor or employee. Use Samfiru Tumarkin LLP’s Pocket Employment Lawyer to find out what you are right now.

Fired for medical reasons?

If your medical condition was in any way a factor in your employer’s decision to fire you while you are on leave, you may be able to file a human rights claim. Your employer cannot let you go due to medical issues or a disability.

If an employee is terminated without cause for reasons unrelated to their medical leave or disability, this is legally permissible, as long as the company provides proper severance pay.

Your employer may also legally fire you while on medical leave if:

• You are dismissed for reasons which sufficiently establish just cause
• Your employment contract has been frustrated

Long-term disability denied? Don’t appeal

If you work in the tech sector and your long-term disability claim has been denied by your insurance provider, you will likely receive a letter inviting you to appeal the decision.

While it might seem like a good idea to do so, in almost all cases, the appeals process will be handled by the same insurer that denied your claim.

Insurance companies make money by not paying claims. They often use the appeals process (sometimes leading claimants to request multiple appeals) to run out the clock on your ability to file a claim against them to get the money you are owed.

If your long-term disability claim is denied, cut off, or comes under “investigation”, contact Samfiru Tumarkin LLP immediately.

LEARN MORE
• Appealing a long-term disability claim denial
• Disability in the Workplace: Your Rights

Employment lawyers for technology industry employees

Our employment lawyers have helped tens of thousands of individuals across Ontario, Alberta, and B.C. enforce their rights. With employment lawyers in Toronto, Ottawa, Calgary and Vancouver, we stand ready to help you solve your workplace issues.

If you are an employee in the tech sector who needs help with an employment issue, contact us or call 1-855-821-5900 to get the advice you need, and the compensation you deserve.