The severance regulations in Ontario exceed basic employment standards legislation through an extensive framework that forces employees and employers to handle it with caution. Severance entitlements under the Employment Standards Act become available to employees who work at companies above the $2.5 million payroll threshold and complete five years of service.
The common law entitlements surpass statutory minimums in most cases. Courts establish severance pay amounts after evaluating factors including age, position, length of service, and market conditions at the workplace. The circumstances of individual employees produce different severance package amounts for workers who occupy similar roles.
Severance packages provide continued salary payments or lump sum payouts as their standard elements and additionally cover vacation payments with bonus guarantees, commission plans, benefits continuation and pension benefits. Terminations carried out without good faith can increase the level of compensation employees receive.
For Milton employees, understanding these nuances is crucial, as accepting an inadequate package means permanently forfeiting potential entitlements that could have provided crucial financial support during a career transition.