Severance Pay

is only awarded under the ESA when you have five or more years of service with you employer and the employer has a payroll of greater than 2.5 million or you are part of a mass termination of 50 or more in a six-month period with part or all of the business closing.

Severance pay under the the Act is equal to one weeks’ regular wages or salary for every year or part year of employment, to a maximum of 26 weeks.

Your employer may offer to you an arrangement of payroll continuance. This allows you to maintain the same payroll schedule and normalize your finances during this time of job loss. The employer gets the benefit of avoiding a large lump sum payout and usually provides payroll continuance as an option when larger sums are involved.

Payroll continuance offers can be riddled with conditions and provisos. Intentionally or not, removal or discontinuation of some benefits during this arrangement may not be legal, however, it is practiced. Conditions, such as finding new employment, is often used to claw back parts of the offering. In some cases the employer may even reduce the offering so greatly that it no longer meets the minimum legal requirement with these conditions.

An employer cannot contract their way out of the law. However, if you sign a release accepting the offering at face value, you have no further recourse. Generally you will be signing that you have taken the opportunity to seek legal counsel and the offering meets or exceeds all requirements prescribed by law and by accepting you have waived any future pursuits or entitlements. Even if the offering is below the legal requirement, you may never become aware of this if you don’t take the necessary action to ensure what is due to you has been provided.

Upon termination there are a number of entitlements that may be due to you. Employers generally don’t know enough about this area to honour all of their legal obligations. A number of areas tied to compensation need to be explored to ensure everything you are due is paid out to you in full.

Notice Pay – Termination Notice, Working Notice or Pay in Lieu of Notice

Did you find this helpful? Want more detailed information that you can use to increase your severance pay? Check out our comprehensive Do It Yourself Guide to Negotiate Severance Pay