Is Severance Pay Ontario Considered Compensation?

Severance Pay Ontario Considered Compensation

If you’re an employee in Canada and your company is getting dissolved, or if you get fired by your employer, you may be entitled to a generous severance package. This is compensation for the years you’ve worked with your employer, as well as any unused vacation days. Severance packages can be substantial, and you should understand the rules around them before you sign any contracts or accept a job offer that could have severance pay built into it.

The Ministry of Labour in Ontario is a helpful resource for helping employees to understand their severance pay Ontario entitlements. However, they’re only able to assist with the minimum statutory severance pay that employers are required to provide under the Employment Standards Act (ESA).

You can also negotiate a more extensive severance package through common law, a set of judge-made laws that determine what is considered reasonable notice for job loss. These laws are based on factors such as your age, length of time with the employer, position, and job market conditions. These rules can add up to an additional 3-6 weeks per year of employment, depending on your circumstances.

Is Severance Pay Ontario Considered Compensation?

You’ll need to speak with an experienced severance lawyer to discuss the details of your situation, but in general, any bonus that you earned over your course of employment with the company should be included in your severance package. For some roles, bonuses make up a significant part of an employee’s total compensation, so the loss of this money can have serious financial consequences.

An employment lawyer can help you calculate the total amount of severance pay and termination, as well as any extra common law notice you should be offered. The process of negotiating a fair severance package in Ontario is complex, and it’s important to work with an attorney to ensure that you don’t get shortchanged.

The severance pay ontario is an essential safety net for many terminated employees. The ESA stipulates the minimum severance pay that employers of a certain size are required to offer their terminated employees. This includes one week of regular wages for each completed year of service up to a maximum of 26 weeks.

If you’ve worked for more than five years with a large employer with a global payroll of $2.5 million or more, you’ll also be eligible for severance pay on top of your termination pay. This is in addition to the minimum notice period stipulated by the ESA.

Your employer can try to reduce the severance pay ontario that they’re required to give you by including a clause in your employment contract that restricts your rights to the minimum entitlements under the ESA. However, many companies fail to create legally enforceable termination clauses or don’t update them when new legislation changes.

The Human Rights Code prohibits employers from dismissing employees on the basis of a protected ground. During the pandemic, it’s particularly important to consult with an expert on employment law in order to ensure that your severance package addresses any allegations of discrimination. Your severance package can compensate you for any harm caused by your employer’s refusal to hire or fire you for a discriminatory reason, and it can include compensation for your lost wages, loss of future opportunities, and distress.