Workplace Layoffs in Ontario: What Employees Need to Know About Severance Packages

What Is Severance Pay and Who Is Entitled to It?

In Ontario, severance pay is compensation provided to employees who lose their job through no fault of their own, such as during workplace layoffs. Severance pay differs from termination pay, as it accounts for an employee's length of service and contributions to the company.

To qualify for severance pay under Ontario's Employment Standards Act (ESA), the following conditions must typically be met:

1. The employee has worked for the employer for at least five years.
2. The employer has an annual payroll of at least $2.5 million.
3. The termination involved a mass layoff or the closure of a business.

Even if an employee does not meet ESA requirements, they may still be entitled to severance (also known as termination pay) under their employment contract or at common law.

Factors Affecting Severance Package Calculations

Several factors influence the amount of severance pay you may be entitled to in Ontario:

1. Length of Service: The longer you’ve been with your employer, the higher your severance or termination pay entitlement.
2. Age: Older employees may receive higher severance or termination pay to account for greater challenges in finding new employment.
3. Role and Responsibilities: Senior-level employees or those with specialized skills may be entitled to larger severance or termination packages.
4. Employment Contract Terms: Your contract may specify severance/termination pay entitlements that exceed the ESA minimum requirements.
5. Circumstances of Layoff: If your layoff appears to breach employment laws, it could be deemed a wrongful dismissal, affecting severance/termination pay entitlements.
   

Steps to Take If Your Severance/Termination Package Is Insufficient

If you suspect your severance/termination package is unfair or below the legal minimum:

1. Consult an Employment Lawyer
   A legal professional can review your severance/termination offer and determine whether it aligns with Ontario employment law. Searching for terms like "employment lawyer Toronto" can help connect you with experienced counsel.
2. Request a Written Breakdown
   Ask your employer for a clear, written explanation of how your severance/termination pay was calculated. This documentation is crucial for legal evaluations.
3. Negotiate or File a Claim
   If negotiations with your employer fail, you may need to escalate the matter. This could involve filing a claim with the Ministry of Labour or pursuing legal action.
   

Wrongful Dismissal and Severance Packages in Ontario

How Can Aaron Waxman and Associates, P.C. Help?

Conclusion

Understanding your severance/termination pay entitlements and legal rights is vital when faced with a layoff in Ontario. Whether you’re negotiating severance/termination pay, considering a wrongful dismissal claim, or simply seeking advice, having knowledgeable legal support is key.

If you’re searching for an employment lawyer in Toronto, Aaron Waxman and Associates, P.C. is ready to assist. Contact us today at 416-661-4878 or awaxman@awaxmanlaw.ca to get the answers and advocacy you deserve.