With our aging workforce, there is an increasing need to terminate more senior employees in order to make room for younger, new entrants to the workforce. As has been discussed in other posts, whether an employee has been wrongfully dismissed is dependent on the amount of notice of termination or payment in lieu thereof that was provided. One of the key factors during a terminated employees severance entitlement is their age and seniority. As a general rule, an employee of more advanced age is typically entitled to enhanced severance as compared to younger employees.
The reason for this is that advanced age employees are likely to have substantial difficulty in obtaining alternate employment, especially if they are approaching retirement age. Accordingly, the severance package is intended to bridge the gap for the period of time the terminated employee is off work. In many recent cases, Courts have awarded payments up to 30 months of severance to a senior employee that was terminated without cause in Ontario
In Ozorio v. Canadian Hearing Society, the Plaintiff was a non-executive level employee that terminated at the age of 60 years old. The Court awarded 24 months of severance given the disadvantage she would have in locating alternate employment.
In order to avoid massive severance obligations to senior, advanced age, long-term employees, employers can ensure that well-written employment agreements are drafted to restrict an employees entitlements on termination and/or they are at liberty to provide advanced working notice of termination rather than payment in lieu thereof. In other words, if an employer intends to terminate an employee in the future, they can provide several months advanced notice, in order to avoid the obligation to make a lump sum severance payout.
If you have any questions about a recent termination from employment in Ontario, feel free to contact Goldstein Law Firm today.