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Severance Pay

Have You Received A Severance Package?

Goldstein Employment Law can assist you in determining whether the employer has provided you with a full severance package given the employers’ obligations under Ontario employment law. Before you sign any documents accepting the initial severance offer, feel free to read our articles about severance pay entitlements, or call our law firm for a free consultation.

What is Severance? 

Your employment has been severed if any of the following has occurred:
The employer dismisses or stops employing you, including where you have become no longer employed due to the bankruptcy or insolvency of his or her employer (note that your entitlements to severance pay in a bankruptcy scenario may be substantially curtailed);
The employer “constructively” dismisses your employment (please refer to “constructive dismissal”) and the employee resigns in response within a reasonable time; or
The employer lays the employee off for 35 or more weeks in a period of 52 consecutive weeks (note that an employer can only lay-off an employee for any period of time if the authorization for a lay-off is expressly included in an employment contract or with the prior written consent of the employee; otherwise, any lay-off, for any period of time, will be deemed to be a termination of employment).

Have You Received A Severance Package?

If you have received a severance package from your employer as a result of being severed from your employment, it is likely that your employer has offered you a package that is less than fair.  The employer has an obligation to offered you less severance pay that they are required by law, in hopes that you do not consult an experienced employment lawyer to determine whether the package is sufficient.  Accordingly, if you sign the initial offer without reaching out to us for a free severance package review, you may be leaving a substantial amount of money on the table.
Instead, please provide the key details of your severance package by filling out the contact form or call our employment law firm at (647) 838-6740 to speak to an employment lawyer now

How Much Severance Are You Owed?

As a rule-of-thumb calculation, you are probably owed approximately one-month of severance pay per year worked.  A number of factors related to your employment (i.e., age, length of service, position, salary, bad faith, inducement from another job, etc.) can serve to increase or reduce the amount of severance you are entitled.  For a quick answer though, one-month per year is the general rule-of-thumb.  If your package is below that amount, please call us for a free severance package review, and we will advise how much additional funds we should be able to negotiate for you on your behalf.

Notice of Termination vs. Pay In Lieu Thereof 

When you are terminated without cause from your employment, you are entitled to notice of termination or a severance package in lieu thereof. In addition, if you have been terminated for just cause, the employer may not have had a justifiable reason for doing so, and if that is the case, then you would also be eligible for a severance package.
Goldstein Law regularly reviews severance packages and has assisted employees in negotiating 100’s of thousands of dollars of additional severance pay from their former employers. When you receive a severance package, please call us for a free consultation to advise if you have received a reasonable offer or if you may have a case for wrongful dismissal.

When Am I Entitled To Severance Pay?

You are entitled to severance pay if you have been terminated from your employment without cause, and often so, if you have wrongfully been terminated with cause and not provided any compensation.
There is no mathematical formula to calculate severance pay, as the amount a Court would find you are entitled requires a fact-specific inquiry. That being said, a typical rule-of-thumb used by Courts in Ontario is that severance pay should be in the range of one-month per year worked. Accordingly, for example, an employee that has worked for 6.5 years, should not accept a severance package under approximately 6 months of pay. In addition, if that employee is close to retirement age, or has a disability, or is generally not re-employable, these factors will serve to lengthen the notice period.
In addition, employees entitlements to severance pay include all forms of compensation, including but not limited to:
There is no mathematical formula to calculate severance pay, as the amount a Court would find you are entitled requires a fact-specific inquiry. That being said, a typical rule-of-thumb used by Courts in Ontario is that severance pay should be in the range of one-month per year worked. Accordingly, for example, an employee that has worked for 6.5 years, should not accept a severance package under approximately 6 months of pay. In addition, if that employee is close to retirement age, or has a disability, or is generally not re-employable, these factors will serve to lengthen the notice period.
In addition, employees entitlements to severance pay include all forms of compensation, including but not limited to:
Salary
Benefits
Bonus
Commissions
Car allowance
Pension
Stock options
A number of factors are considered in determining the sufficiency of a severance package, including but not limited to your age, job title, years’ of experience, level of seniority, and any other factors, including any medical issues, a disability, maternity leave issue, or other human rights issues when an employer has failed to uphold its duty to accommodate.
If an employer has not made provision for all forms of compensation in a severance package, it would be deemed insufficient by a Court and you have a case for wrongful dismissal. Even if you do think that your severance package is fair, our employment law firm is happy to have a free consultation to discuss your rights and entitlements to determine whether we can recover more money for you.