Advising Employees on Termination Packages

Toronto Employment Lawyers Advising Employees on Termination Packages 

Getting fired can be one of the most stressful experiences anyone will go through in their lifetime. Following a termination, it is imperative to obtain advice from a knowledgeable employment lawyer as soon as possible to fully understand your options, receive clarification about your rights, address any potential risk, and ensure you walk away with the most advantageous arrangement.

At Sultan Lawyers in Toronto, we represent employees throughout the termination process: we can review your termination package, negotiate with your former employer, and represent employees in any litigation that may arise. We provide the protection you need following the termination of your employment. Let us focus on the legal aspects of your termination so that you can focus on moving forward and finding new employment.

Termination in Ontario 

Most provincially regulated employees in Ontario are entitled to notice of termination or pay instead of that notice (unless they have been terminated for cause). This also applies to employees who have been constructively dismissed.

Under the Employment Standards Act, any employee who has been employed for at least three months is entitled to notice of termination or pay in lieu of that notice. That is, an employee must be told a certain number of weeks in advance of their termination that they will be fired and must continue working for that period of time, or they must be let go right away but paid for the period of their notice.

So, for example, if an employee has been employed with a company for less than a year, the employee is entitled to one week’s notice during which time he will continue to work. In the alternative, if the company wishes to release the employee immediately, they can pay a week’s salary up front (i.e. the same amount of money they would have paid had the employee continued to work for one week).

The length of notice (or pay in lieu of it) is calculated as follows:

Length of Employment	Notice Required
Less than 1 year	1 week
1 year but less than 3 years	2 weeks
3 years but less than 4 years	3 weeks
4 years but less than 5 years	4 weeks
5 years but less than 6 years	5 weeks
6 years but less than 7 years	6 weeks
7 years but less than 8 years	7 weeks
8 years or more	8 weeks

 

It is important to note that this is the bare minimum that terminated employees are entitled to under the legislation. Under the common law, notice of termination is generally much higher than what is provided under the Employment Standards Act, and will take many factors into account including: the age of the employee, how long they were employed, their level of responsibility (i.e. were they an executive or other high-ranking position), their probability of finding comparable work, and how close they are to retirement, among other factors.

Severance Pay in Ontario 

While many people refer to when they talk about termination packages, the term severance actually refers to something else under Ontario law. Severance pay and termination pay are not the same.

Severance pay is the compensation provided to long-term employees whose employment has been “severed”. It is intended to compensate them for the losses that come with the end of lengthy employment, such as loss of seniority, and similar. Only certain employees are eligible for severance, depending on the size of the employer, and how long the employee worked there.

Federally-Regulated Employees 

Most employees in Ontario work in industries that are provincially regulated. A smaller number of Ontario employees, however, work in industries that are regulated by the federal government, including banking, radio and T.V. broadcasting, airlines, telecommunications, railways, and shipping. Instead of the Employment Standards Act, these employees are subject to the Canada Labour Code, which also provides for minimum standards that employers must comply with when terminating an employee.

Under the Canada Labour Code:

• A terminated employee who has completed at least three months of employment for the employer must be provided with either two weeks’ notice of termination, or pay in lieu of that notice;
• A terminated employee who has completed at least twelve months of employment for the employer must be provided with either two days’ wages for each completed year of service or five days’ wages (whichever is greater).

It is important to note that the Canada Labour Code only provides for a minimum threshold of rights. Under the common law, many employees may be entitled to much more notice or pay in lieu of that notice.  You should never accept a termination package before consulting with a knowledgeable employment lawyer first.

For Advice on Termination Packages Contact the Experienced Toronto Employment Lawyers at Sultan Lawyers 

The knowledgeable employment lawyers at Sultan Lawyers have advised hundreds of employees across various industries and sectors following their termination. We regularly review termination packages and represent employees in negotiating more beneficial terms for their departure. Where necessary we represent employees in wrongful dismissal and constructive dismissal complaints. When you are our client, you can count on our persistence in achieving the best results. Contact us online or at 416-214-5111 for a consultation.