What You Need to Know About Severance Pay and Severance Packages
If you are a non-unionized employee in Ontario, BC or Alberta, and have been terminated or dismissed without cause, you are generally entitled to notice of termination, or pay in lieu of notice. The term “pay in lieu of notice” is also known as severance pay, termination pay, a severance package, or a layoff package.
At Samfiru Tumarkin LLP, our Toronto severance lawyers, Vancouver severance lawyers, Ottawa severance lawyers and Calgary severance lawyers can help you determine if the severance package you have been offered by your employer is fair. Documents that outline severance packages can often be intimidating, and extremely difficult to assess whether the severance offer is adequate. Often times, they fall far short of the amount that you are truly owed upon termination. A wrongful dismissal occurs when your employer fails to provide enough severance pay – that’s where we come in.
During a consultation, our severance pay lawyers will take the time to gather information about you, your job, the company, your compensation and the events leading up to termination. We will then tell you what your severance package should contain, allowing you to compare our assessment with what you have actually been offered by the company.
Use our Severance Pay Calculator to get an estimate on the amount of common law severance pay you are owed, however you should always speak to one of our lawyers directly to ensure that you understand your situation correctly.
Do not sign a severance offer without seeking legal advice! Employers will often try to convince a terminated employee that their first offer is fair. This is usually not the case. Continue reading to find out more about your employment rights where severance pay is concerned. Contact one of our Toronto employment lawyers, an employment lawyer in Vancouver, an Ottawa employment lawyer or an employment lawyer in Calgary to get a severance pay consultation.
Learn more about Severance Pay in:
WATCH: Employment lawyer Lior Samfiru explains everything you need to know about severance pay on an episode of the Employment Law Show.
What You Need to Know About Severance Pay in Ontario, BC and Alberta
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Severance Offer Deadlines
If your employer has imposed a deadline on a severance package offer, your best course of action is to ignore it. Your legal rights to termination pay do not expire after 24 hours, 3 days, or even 2 weeks! Severance offer deadlines are a pressure tactic to make you accept a poor offer. -
"One Week Per Year" Myth
There is no "one week per year of service" rule of thumb when calculating severance pay. Use Canada's Severance Pay Calculator to find out how much you might be owed. -
Talk to our Severance Package Lawyers First
Never sign back a severance offer without seeking legal advice. Before you sign, call us to make sure you have been offered a fair severance package. -
Ministry of Labour/Employment Standards Branch
Do not call the Ministry of Labour or Employment Standards Branch for advice on severance pay! These options can only help you with MINIMUM severance entitlements under the employment standards act. An employment lawyer can help you obtain MAXIMUM severance pay under common law.Once you file a claim with the Ministry of Labour (Not the Branch), you waive your right to use one of our skilled employment lawyers.
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Termination For Cause
Poor job performance. Bad economy. Late once too often. Employers may use a Termination for Cause in an attempt to avoid paying severance. In most cases, those just cause dismissals are not legitimate, and full severance pay is still owed. -
Calculating Severance Pay
The main factors that make up a severance package are age, salary, length of service, employability, benefits, commission, bonus, car allowance, pension, stock options. Learn more about how to calculate severance pay. -
2-year Limitation Period
Under common law, you have 2 years from the moment of termination to pursue full severance pay from your former employer. -
Employment Contracts
The employment contract you signed when accepting the job may contain a termination clause that impacts the amount of severance you are owed upon termination.
Areas Served in Ontario
| Ajax | Guelph | Mississauga | Scarborough |
| Aurora | Hamilton | Nepean | Sudbury |
| Barrie | Kanata | Oakville | Toronto |
| Belleville | Kawartha Lakes | Orleans | Brampton |
| Kingston | Oshawa | Vanier | Brantford |
| Kitchener & Waterloo | Ottawa | Vaughan | Burlington |
| Lindsay | Peterborough | Whitby | Cambridge |
| London | Pickering | Windsor | Georgetown |
| Markham | Richmond Hill | Gloucester | Milton |
| Sarnia |
Areas Served in British Columbia
Questions About Severance Pay
We have compiled a quick list of questions about or related to severance pay, below. We also take a provincial look at severance packages through our resources for Ontario, Alberta and BC. If you still have a questions about your termination rights, please email us directly at Help@EmploymentLawyer.ca for answers.
Can my employer choose to give me advance notice of termination instead of severance pay?
When it comes to firing an employee, the employer can go with one of three options:
- Provide the employee with working notice. The employee is told that they will be let go from their job at a later date, which could be weeks, months or even a year later.
- Give the employee pay in lieu of notice. Instead of advance notice of the termination, the employee is provided a severance package.
- Give a combination of both notice and pay.
If your employer decides to provide you with working notice instead of severance pay, you should contact our employment law team. There is a good chance that the working notice is not long enough, and that severance pay is still required at the end of the notice period.
Is it better to quit or get fired?
Employees in Canada are not entitled to severance pay if they quit their job. However, if they are constructively dismissed, they can collect severance pay.
If you quit your job, you will not be entitled to Employment insurance (EI) unless, again, you experienced a constructive dismissal. EI is only available to employees who are fired.
Can severance pay be paid over a period of time?
The employer can choose whether to provide severance pay over a period of time (known as salary continuance) or in a lump sum. The employment & labour lawyers at Samfiru Tumarkin LLP often negotiate a payment method that benefits their clients.
Are federally regulated bank employees owed severance pay?
Yes. Federally regulated bank employees are entitled to full, common law severance pay. Find out more about layoffs and severance for specific banks:
What is a fair severance package in Canada?
A fair severance package in Canada is one that takes into account multiple factors, including the person’s age, position at the company, length of service and ability to find new employment.
Severance pay by company
Our firm has created a comprehensive resource to help you understand severance pay rights, as they relate to different companies across Canada.
Severance pay by job
At Samfiru Tumarkin LLP, we understand that losing your job can be a stressful and uncertain time. That’s why we’ve created a comprehensive resource to help you understand how severance pay works for different non-unionized jobs in Canada.
Resources About Severance
Explore some of our past blogs and episodes from the Employment Law Show related to severance pay in Ontario, BC and Alberta.Pocket Employment Lawyer
Before you call an employment lawyer, use the Pocket Employment Lawyer to determine if your employment law rights have been violated, and what you should do about it.
Use the Pocket Employment LawyerSeverance Pay Calculator
The accurate, anonymous and FREE severance pay calculator tool that has been used by over 1,000,000 people to calculate their possible severance package in Ontario, BC and Alberta.
Use the Severance Pay CalculatorBlog
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