Originally published Feb. 1, 2010
All this month I will be blogging about employment law after a conversation I had with a lawyer about a few common questions I hear from students. I spoke with Melissa Belliveau, LLB, an Associate Lawyer at the law firm Kitchen Simeson LLP (www.kslawfirm.ca) in Oshawa, Ontario.
Please be advised that the information that Ms. Belliveau has provided below is just that: information. It should not be considered legal advice. Please consult a lawyer if you have any legal concerns.
The first question I asked Ms. Belliveau was:
If I get fired, how much notice and pay am I entitled to?
Termination for most employees in Ontario is covered by the Employment Standards Act, Part 15, which can be accessed at http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_00e41_e.htm . Although most employees are covered, people working under federal jurisdiction such as employees of banks, airlines, the post office, and politicians are not covered. In some circumstances, it also does not apply to construction workers, personal support workers, and homemakers.
The Act states that “No employer shall terminate the employment of an employee who has been continuously employed for three months or more unless the employer” provides notice (as described in sections 57 and 58) or pay in lieu of notice (section 61). In other words, once you have worked three months or longer (before that you are not entitled to notice or pay in lieu of notice), your employer must offer you either a notice of termination (with a basic minimum requirement of roughly one week per year of service up to eight weeks) or pay in lieu of notice (the pay you would have earned over the notice period). According to the act, any benefit plans the employee is part of should also be continued over this notice period.
Severance pay is separate from notice of termination and pay in lieu of notice. Severance pay is awarded when a person has worked for over five years and the employer either has a payroll in Ontario of at least $2.5 million or has severed the employment of 50 or more employees in a six-month period because all or part of the business closed. Severance pay is calculated by multiplying the employee’s regular wages for a regular work week by the number of years of service to a maximum of 26 weeks. For example, if you were working in a position for six years at $450 per week, the minimum amount of severance pay you should receive is $2700.
The Employment Standards Act is simply a base standard. In reality, according to case law, employees are often entitled to a much longer notice period or much more pay in lieu of notice. In addition, there is legal support for the continuation or compensation in lieu of the entire compensation package of an employee ( i.e. company car, stock options, bonuses, pensions, etc). Many lawyers (such as Ms. Belliveau) will do a consultation with an employee to evaluate what they have been offered and if they are entitled to more. They can often secure a significantly larger amount of funds or benefits.
There are a few other important notes to make about termination and severance of employment.
- The information provided above is for people who have been dismissed without cause. If you have been dismissed with cause, meaning that you breached your contract of employment in some way, you are not entitled to notice, pay in lieu of notice, or severance pay. Some examples of reasons for dismissal with cause are theft, committing a criminal offence, and serious insubordination.
- If you resign from your position, you are not entitled to notice, pay in lieu of notice, or severance.
- “Constructive Dismissal” is when your employer makes a significant change to a fundamental term or condition of employment without your consent. An example of this might be a significant reduction in salary such as $50,000 to $30,000. If this happens, you may be entitled to notice, pay in lieu of notice, or severance.
- If you feel your human rights have been violated in the termination of your employment, see the Human Rights Commission (http://www.ohrc.on.ca/en) and/or a lawyer immediately. The Human Rights Commission has a legal help centre that is of great help.
- Sometimes the termination of employment comes with a release clause. These clauses can be very broad and may take away your right to sue the company completely. Read the clause carefully and ask a lawyer to read it if you are at all unsure about it. Release clauses will sometimes be worded so that if you get paid for any work, even a volunteer stipend, the notice, pay in lieu of notice, or severance stops.
- You should not have to sign a clause in order to get your notice, pay in lieu of notice or severance entitled to you under the Employment Standards Act. Your employer must also give you your record of employment within seven days of termination. Know which code they have used on your record of employment because it determines your qualification for Employment Insurance (E.I.). Visit the Employment Insurance Act (http://www.servicecanada.gc.ca/eng/ei/legislation/ei_act_entry_page.shtml) to identify which codes qualify you for E.I.
Melissa Belliveau has written an article on this topic that can be found at www.kslawfirm.ca/snap1.php.