Severance Pay Ontario Benefits Employees

Many people may not know that when they are terminated from a job, they can be eligible to receive more than they expected in terms of compensation. While many people use the terms termination pay and severance pay interchangeably, there is a difference between the two in Ontario. All employees who are terminated without cause are entitled to termination pay, but not all are automatically eligible for severance pay. The difference is based on whether or not an employer meets the criteria set out by the Employment Standards Act (ESA).

Severance pay ontario is compensation given to an employee upon their departure from a company, often in addition to their notice period. The factors that determine an equitable severance package draw from both common law and the ESA, which sets out minimum standards. An employer cannot deviate from these standards in negotiations with an employee.

In addition to severance pay Ontario, employers in Ontario are also required to provide their terminated employees with their working notice or pay in lieu of notice. The amount of notice that is required depends on how long an employee has been employed. For example, an employee who has been with a company for three years would be entitled to three weeks of pay in lieu of notice.

How Severance Pay Ontario Benefits Employees

Most non-unionized employees in Ontario are entitled to severance pay if they have been with the company for more than five years. However, it is important to note that the ESA only outlines the minimum amount of severance pay that an employer must offer to an eligible employee. Employers may choose to offer more than the minimum severance pay and it is up to each individual company to decide what they will offer their employees.

In some cases, employees may be entitled to a bonus payment if they are terminated before the end of the bonus cycle. If this is the case, the bonus will be paid out during the severance pay period, unless there are clear contractual terms that prevent it from being paid. It is important to review any bonus policies with an experienced employment lawyer prior to being laid off in order to ensure that an employee is properly protected when it comes to post-termination benefits.

Aside from severance pay, a person who has been fired can seek damages from their employer for unlawful conduct that resulted in their termination. For instance, if an employer is found to have wrongfully dismissed an employee due to a serious safety issue, the employee can file for damages. The same applies if an employer fires an employee for supporting a union or for taking certain types of leave, including parental and maternity leaves. Alternatively, an employee who was fired for cause may be able to claim constructive dismissal and receive damages that are equal to the number of weeks of their severance pay. In any event, an employee who believes that their severance package is insufficient should consult an experienced employment lawyer at Samfiru Tumarkin LLP.