Severance packages for automotive industry employees

The automotive industry in Canada is a significant part of the country’s economy, generating a revenue of over $100 billion. It encompasses a wide range of activities related to the design, manufacturing, and distribution of vehicles, as well as the associated supply chain and aftermarket services.

In terms of employment, the automotive sector is a major contributor to Canada’s workforce. The industry employs over 125,000 people directly. These employees work in various roles, including engineers, designers, assembly line workers, mechanics, salespeople, and administrative staff, among others. Additionally, the industry indirectly supports many more jobs through its extensive supply chain, which includes suppliers of parts, materials, and services.

Canada is home to numerous automotive businesses, including assembly plants, parts manufacturers, research and development facilities, and dealerships. Some of the most prominent automotive companies with operations in Canada include General Motors, Ford, Toyota, Tesla, Honda, Volvo, and various parts suppliers, like Magna.

Fired or lost your job in the automotive industry?

Non-unionized employees who have been fired or lost their job in the automotive sector have workplace rights, including the right to a full severance package.

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

LEARN MORE
• Employee rights when a company downsizes
• Layoffs in Canada
• Severance packages for different companies

Severance pay in the automotive industry

In Canada, non-unionized employees in the automotive 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.

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

LEARN MORE
• Severance for provincially regulated employees
• Federally regulated workers and severance pay
• Severance packages in mass layoffs

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.

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

The employment lawyers at Samfiru Tumarkin LLP have represented tens of thousands of employees over the years in severance package negotiations.

• LEARN MORE: Severance pay by company

We have successfully secured much larger amounts for individuals employed across a variety of positions, 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.

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.

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

To figure out how much compensation you may be entitled to, use our firm’s Pocket Employment Lawyer.

Don’t sign on the dotted line!

Do not accept any severance offer, termination papers or exit agreement that the automotive 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 automotive industry?

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, but aren’t given a proper severance package.

What you should receive is based on many factors. An employment lawyer at Samfiru Tumarkin LLP can analyze your situation and explain how much compensation you may be owed.

Fired “for cause” from an automotive company?

In Canada, termination or dismissal for cause is reserved for the worst kinds of workplace offences, such as theft, misconduct, and assault.

If you are a non-unionized employee fired for cause in the automotive industry, your employer doesn’t have to provide you with a severance package and you can’t access Employment Insurance (EI) benefits.

However, to justify this type of dismissal, the employer would have to prove that:

• Your actions constituted serious misconduct
• Progressive disciplinary measures were applied
• A less severe punishment would be inappropriate

If you are fired for cause for any reason, contact an experienced employment lawyer at Samfiru Tumarkin LLP immediately.

We can review your situation, enforce your rights, and help you secure the compensation you deserve.

Fired after a performance review?

If you are a non-unionized employee in the automotive sector who has been fired following a performance review or after being put on a Performance Improvement Plan (PIP), you may still be entitled to severance pay.

Companies use PIPs to justify letting you go, sometimes without full severance, if you don’t complete it successfully.

However, employers in Canada don’t automatically have the right to fire you, especially for cause, if you fail to meet the requirements outlined in the PIP.

Businesses often set unrealistic goals that are extremely difficult to achieve, or don’t give you the proper support to improve your work.

If you were fired following a “bad” performance review, or for failing a PIP, our firm can help you determine how much compensation you may be owed.

Changes to your job

Non-unionized employees in the automotive industry do not have to accept a significant change to their job. Large modifications such as a demotion, cut in pay, reduction in hours, or 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. However, before you quit, talk to our team first to learn more about the process and if it applies to you.

LEARN MORE
• Can your employer make changes to your job in Ontario?
• Changes to your employment in B.C.
• What happens when your job is changed 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 automotive industry 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 automotive sector, you do not have to tolerate harassment in the workplace or discrimination from 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.

Independent contractor? Think again

If you were hired in the automotive sector as an independent contractor, there is a significant chance that you have been misclassified and are actually an employee.

Many employers aren’t aware of the nuances between the two roles. Some deliberately misclassify employees as contractors to avoid acknowledging certain employment rights, like minimum wage, vacation, overtime pay, and severance pay when an individual is fired.

Companies, including those in the automotive sector, can’t avoid their legal obligations 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 right now to find out which role applies to you.

Fixed-term contracts

• If your employment is terminated before the end of your fixed-term contract, you are entitled to the remaining pay, or balance, as outlined in the agreement.
• If you work two or more consecutive fixed-term contracts with the same employer, you are likely considered an employee and are entitled to full severance pay if your job is lost, or your contract is terminated or not renewed.

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 can’t let you go due to medical issues or a disability. Such an action is illegal and a violation of your human rights, and you are owed a severance package and potentially additional compensation.

It is legally permissible for an employer to fire someone without cause for reasons unrelated to their medical leave or disability, 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 automotive industry 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
• Short-term disability claim denials

Our team also represents individuals in all Canadian provinces (excluding Quebec) who have been denied a life insurance, critical illness, or mortgage insurance claim.

Employment lawyers for automotive 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 a non-unionized employee in the automotive 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.

Disclaimer: The materials above are provided as general information about the rights of employees in Canada. It is not specific to any one company and should not be read as suggesting any improper conduct on the part of any specific employer.