Severance pay when a business closes due to COVID-19 | Employment Law Show TV – S5 E18

Episode Summary

SEVERANCE PAY WHEN A BUSINESS CLOSES DUE TO COVID-19, demotion after an injury, a request to work from home, and more on Season 5 Episode 18 of the Employment Law Show with employment lawyer Lior Samfiru, Partner at Samfiru Tumarkin LLP.

Watch above to discover your workplace rights and learn everything you need to know about employment law in Ontario, British Columbia, and Alberta, on the only employment law show on both TV and radio in Canada.

Episode Notes

Factors that determine severance pay

I was let go from my position and believe I’m only entitled to my regular salary. Is this true?

While the regular salary does factor into severance entitlements, as well as age, position and length of service. Other factors such as vacation pay and overtime pay are also calculated into a severance package.

Segment starts at 3:15

CALL: Demotion after return from a workplace injury

Upon returning back to my job on modified hours after a workplace injury, I have discovered that I will now be reporting to a fellow director from another department who is now handling the section that I have been overseeing for the past 20 years. Can they do this?

Employers are not permitted to demote an employee for no reason, and it can result in a constructive dismissal. A demotion can be considered as a transfer to a less prestigious or desirable even if the payment remains relatively similar.

Segment starts at 6:15

Request to work from home due to COVID-19 anxiety

I have been extremely anxious about the pandemic and asked my employer to let me work from home. While the office appears to be decently safe, I don’t want to take any chances. Does the company have to agree to let me work from home if I request this? I live with my husband and his boss is letting him work from home.

Generally, an employer is allowed to require employees to return to the office unless there is a government mandate to let employees work from home. It is important to communicate your concerns with your employer. A refusal to return to work can be considered a resignation.

Learn More
COVID-19 Returning to work and job abandonment
Returning to work during COVID-19
Can I work from home during a stay-at-home order?

Segment starts at 9:05

Severance Pay When a Business Closes Due to COVID-19

1️⃣ Does a business have to pay severance to employees when they close permanently due to the impact of the pandemic?

A business shutdown does not relieve the owners to pay their employees severance that they have let go. If a business does not have any assets remaining, it might not have the ability to meet its severance obligations.

Segment begins at 12:39

2️⃣ How is severance pay calculated during COVID-19?

While the usual factors for severance still matter in terms of calculating severance, there are additional factors added to severance during the pandemic. As there are fewer businesses hiring and many Canadians out of work, the economy can factor into a severance offer.

Segment begins at 14:45

3️⃣ Can my employer give me working notice instead of severance pay?

Working notice is possible for employers to give to employees. The notice period counts towards an employee’s future severance.

Segment begins at 16:17

4️⃣ Do I have to accept the company’s severance offer on the spot?

Legal rights expire two years after the initial termination. The pandemic has not affected the timeline in order to accept a severance offer.

Segment begins at 18:05

5️⃣ If my employer offers me a job at another business under their ownership, do I have to take it?

Employees should ensure their service at a new job is considered continuous from the previous business. Losing seniority is important as it can severely affect severance entitlements.

Segment begins at 19:20

6️⃣ When should I contact an employment lawyer?

If your job has been impacted significantly due to the pandemic in any way, it is important to contact an employment lawyer.

Segment begins at 20:25

CALL: Put on temporary layoff at a federally regulated company

I was put on a temporary layoff by a federally regulated company due to a shortage of work. However, they have since hired new people in my department. What recourse do I have?

Employers are not permitted to put employees on a temporary layoff without their consent. Employees who have been laid off can treat the layoff as a termination and pursue their severance entitlements.

Segment starts at 22:00

CALL: Severance based on new compensation structure or old

After six years I have been moved from a salaried sales structure to a mixture of salary and commission. My overall income won’t change. If I am let go, will my severance be calculated based on my entire six years with the company, or only the amount of time on the new contract?

It is important to contact an employment lawyer before signing a new employment contract as it could potentially limit an employee’s future severance. Signing a new agreement does not negate an employee’s seniority

Segment starts at 25:31

The promise of a promotion retracted

I was promised a promotion last year. This year, I didn’t get it. The promotion was given to someone else, and I was let go. Would this be considered discrimination?

Discriminatory behaviour implies an employer has done something based on prohibited grounds such as based on an employee’s age, religious beliefs or ethnicity. Discrimination is illegal in any workplace. However, not receiving a promotion on the act itself is not discrimination.

Segment starts at 27:08

NEXT EPISODE: Employment Law Show S5 E19 – Common Employment Law Terms, Why They’re Important

PREVIOUS EPISODE: Employment Law Show S5 E17 – 5 Things you should do when fired, laid off or let go from your job