What is severance?
Severance refers to the payment you may be entitled to when your employment is terminated. Most Ontario employees who have been terminated are entitled to some form of severance.
How much severance should I get?
That is the million-dollar question. Your severance entitlement can be affected by a number of different factors. The most important factors, however, are your written terms of employment (if any), your age (the older you are, the more severance you are entitled to), your length of service (the longer you have been employed, the more severance you should receive), the character of employment (senior level employees are entitled to more severance), and the chances of re-employment following your termination (poor chances of re-employment increase your severance entitlement).
Our handy severance calculator can provide you with a rough estimate of what your severance entitlement might be. In many cases, your range of expected severance will be around 1 month per year of service.
I was told that I should receive 1 week per year of service. Is that wrong?
It is not wrong, just incomplete. In Ontario, for instance, the Employment Standards Act ("ESA")requires that employers with a payroll of over $2.5 million pay employees who have been employed for 5 years or more, 1 week of "severance" per year of service.
ESA "severance" is simply the bare minimum in Ontario and is different from "common law severance" which is awarded by the courts. One does not replace the other. This confusion probably exists because the term "severance" is often used to describe both entitlements.
Can my severance payment be lower than the severance calculator results?
Yes. There are several reasons why your severance might be reduced. For instance, your severance entitlement might be limited if:
You accept a low severance offer from your employer.
You have previously signed a contract that limits your severance entitlements.
- You "mitigate your damages", meaning you find alternate employment during the severance period.
- You fail to make reasonable efforts to "mitigate your damages".
Is it possible to negotiate my severance with my employer?
Most employees have no interest in fighting an extended legal battle against their employer. However, that does not mean you should accept your employer's first severance offer without negotiating. In our experience, it is very rare that an employer's first severance offer is one that we would consider "reasonable". This is deliberate - in many cases, employers expect you to negotiate.
Some employees attempt to negotiate their severance package on their own, which is not always successful. When you hire an employment lawyer, you not only benefit from their legal expertise and experience, but also their reputation. Hiring an employment lawyer to negotiate your severance with your employer conveys a strong message that you are prepared to pursue legal action. This often causes employers to "get serious" in negotiations much faster and can lead to better settlement offers.
I have been terminated, but my employer is refusing to pay me any severance.
What can I do?
The only way to force your employer to pay you common law severance is to sue them in court. We strongly advise anyone against commencing legal proceedings on their own. Without the proper knowledge and expertise, you can seriously hurt your own case or be exposed to cost penalties.
What can Hyde HR Law do for me?
The employment lawyers at Hyde HR Law are severance experts. We can evaluate your severance entitlement, negotiate a reasonable severance package with your employer, and help you pursue legal action in the event those negotiations are ineffective. We have successfully negotiated countless severance packages for our employee clients. Our focus is on "value for services", meaning we do our very best to ensure that each and every one of our clients leaves our firm in an improved financial position. Contact Hyde HR Law today for advice on your severance package.