Employees Receive Severance Pay
If you’ve ever been laid off from a job, you know how difficult it can be to deal with the sudden loss of income and stress related to finding another employment opportunity. For that reason, it’s essential for both employees and employers to understand their post-termination obligations, including the existence of severance pay.
everance pay Ontario is compensation paid to an employee whose employment has been “severed” by the company, according to Ontario’s Employment Standards Act (ESA). It differs from termination pay, and it’s important to note that not everyone qualifies for severance pay. To qualify, an employee must have worked for a company that has a global annual payroll of $2.5 million Canadian or more for at least five years.
An employee’s severance package may include one week of their regular wages per year of employment, up to a maximum of 26 weeks. This is a standard minimum severance package guaranteed to most Ontario employees, although an employer may offer more under contract or common law. If an employer has a collective agreement that sets out severance payments, the terms of that must be followed.
Can Part-Time Employees Receive Severance Pay?
Non-unionized employees in Ontario can be terminated at any time without a cause, but in order to be fired with cause, they must be given working notice or compensation for the duration of the notice period. This is a high standard for employers to meet, especially since many of these workers are relying on the money they will earn from their severance packages to cover living expenses while they search for other jobs.
The Ministry of Labour recommends that employers consult an experienced severance package lawyer when they need to dismiss employees. A lawyer can help them determine if an employee is entitled to severance pay, how much they are owed, and how to calculate the amount accordingly. In addition to severance pay, they can also review an employment contract and negotiate the best possible terms on behalf of their client.
It’s also important to remember that severance pay is only paid if the severance package is approved by the Director of Employment Standards at the Ministry of Labour, and the employee signs the severance package agreement. This process can take up to three years, and it’s crucial for both parties to be transparent during this process.
For many employees, losing their jobs can be a traumatic experience, especially if they’ve worked for a long time and have substantial financial ties to the company. As a result, they’re often anxious to find out whether they’ll receive any form of severance pay. Luckily, the answer is generally yes. However, it’s also vital to understand that the severance pay an individual is owed may be significantly different from what they’re actually offered in their contract or common law. To avoid any confusion, it’s essential to seek advice from an experienced severance package lawyer.