In addition to finding a new job, severance pay is usually an employee`s main concern when laid off. If you compare your grades with those of other workers or check out online calculators, you may find that some people receive weeks of severance pay for the same amount of work, while others receive months. This section is intended to clear up some confusion about the amount of severance pay an employee in Ontario should receive. The experienced lawyers at Grossman Gale Fletcher Hopkins LLP in Toronto advise employees and employers on their severance rights and obligations when negotiating severance benefits. For over 30 years, our law firm has provided clients with strategic advice on negotiating their severance packages. Contact us online or at 416.364.9599 to speak with one of the skilled employment lawyers on our team. How to calculate your severance pay: Multiply your regular salary by the sum of the years of employment and the number of months of employment divided by 12. It is not possible to draw up a catalogue of what constitutes a reasonable period of time in individual cases. The appropriateness of termination should be decided on a case-by-case basis, taking into account: Although “termination”, “severance pay” and “severance pay” are often used interchangeably, these are different legal terms: if you are not sure whether you are entitled to severance pay, first check the terms of your employment contract. If your contract does not mention severance pay, you may still be entitled to the minimum standards set out in the Employment Standards Act or the common law.
The maximum amount an employee can receive as severance pay is 26 weeks. If you have a written employment contract, your entitlement to severance pay is in one of the 3 camps, as follows: To be eligible for severance pay in Ontario, you must have been employed by your employer for five years or more in addition to “leaving” your job; and ESA salaries and common law severance pay do not “double”; If you receive compensation from the ESA, your severance pay will be reduced by that amount at common law. Regular rate: This is an employee`s rate of pay for each hour worked without overtime during the employee`s work week. Regular pay: These are salaries other than overtime pay, paid leave, paid leave, bonuses, severance and severance pay, as well as certain contractual rights. Standard work week: For an employee who normally works the same number of hours per week, a standard work week is a week with the same number of hours, without overtime. Some employees do not have a normal work week. That is, they do not work the same number of hours each week or they are paid on a different basis of time. For these workers, the “regular wage” for a “regular work week” is the average amount of regular wages earned by the employee during the weeks in which he or she worked during the 12-week period immediately preceding the date of separation from employment. How to give written notice of termination In most cases, written notice of termination must be given to the employee. It can be provided in person or by mail, fax or e-mail, provided that the delivery can be verified. Special dismissal rules exist if an employee has an employment contract or collective agreement that provides seniority rights that allow an employee who is to be dismissed or whose employment relationship is to be terminated to replace other employees (“bump”) and if there is a collective dismissal (50 or more employees).
Severance pay (up to 26 weeks) Under the ESA, if an employer has an overall payroll of at least $2.5 million, employees who have been employed for five years or more are also eligible for severance pay. Severance pay is calculated by multiplying the employee`s regular salary for a regular work week by the number of years of service and the number of months of service divided by 12 for years not completed. In summary, employees with 5 or more years of service are entitled to one week of severance pay per year of service, prorated for incomplete years, up to a maximum of 26 weeks. When to Pay Termination and Severance Pay Severance and severance pay must be paid to an employee either seven days after the termination of the employee`s employment relationship or the employee`s next regular day of payment, whichever is later. An employer may pay the portion of the severance pay in installments if the employee agrees in writing. Under the ESA, Ontario employers must continue to fund all employee benefits during the statutory termination period. This may conflict with the terms and conditions of disability insurance plans. Common Law Notice In the absence of a binding contract of employment setting out the terms agreed to by the parties in the event of termination of the employment relationship without cause, an employee is entitled to reasonable dismissal. This common law requirement usually equates to a notice or payment instead of a notice in addition to Ontario`s statutory minimum payments. The determination of “reasonable notice” at common law is both an art and a science, since there is no prescribed form for determining the publication of the common law.
The classic statement of factors considered in the assessment of damages at common law is found in Bardal v. Globe & Mail Ltd., which reads: Overview The cost of terminating an employee in Ontario depends on a combination of contractual, common law and legal terms. The termination provisions of the Employment Standards Act, 2000 are minimum requirements that cannot be excluded. Some employees may have rights under common law or other statutes that give them broader rights than those related to termination of employment under the Employment Standards Act, 2000. Common law obligations for fair dismissal will always add an element of uncertainty to an employee`s rights at the time of dismissal, as the calculation of severance pay at common law provides an understanding of the impact of the dismissal on the individual. Requires employees. In particular, age, seniority, type of employment and availability of suitable alternative employment may affect his common law rights. The only way employers can try to mitigate the cost of common law obligations is to use well-worded termination provisions in their employment contracts.