One of the most important issues that arises when an employer dismisses an employee in Ontario relates to notice pay. Often commonly referred to as severance pay, termination pay or a severance package, notice pay is owed to employees who have lost their job through no fault of their own. In this post, we will be discussing some of the basics of termination pay, including wrongful dismissal, the accuracy of online severance pay calculators, and the value that an employment lawyer can bring to anyone who has been recently dismissed from their place of employment.
What is wrongful dismissal?
Wrongful dismissal is a term that is often misunderstood. An employer is legally allowed to let employees go for a wide variety of reasons that don’t involve a breach of duties, poor performance or inappropriate behaviour by the employee. However, when letting an employee go, the employer must provide the appropriate notice and/or pay in lieu of notice.
Wrongful dismissal occurs when an employer fires an employee without just cause and does not provide the appropriate advance notice or the appropriate pay in lieu of notice. The dismissal is considered wrongful in that the employee is not provided the appropriate notice or payment that is required since they were terminated through no fault of their own.
The specific reason for termination is not the most important issue in a not for cause situation. It could simply be that the employer is restructuring. The crucial element for any employee that has been dismissed through no fault of their own is the period of notice given to the employee prior to their dismissal and the notice pay provided.
Notice pay requirements
Employers in Ontario must always provide proper written notice of termination, or payment in lieu of notice, when letting an employee go who has been continuously employed for at least three months. A combination of working notice and termination pay can also be used if the two add up to the required amount of notice the employee should have received.
When discussing notice due to employees, it is important to know that the Employment Standards Act contains only the minimum entitlements that employees must receive on termination, whereas common law notice, obtained through a negotiated settlement or a court action, offers a greater entitlement.
How much notice am I entitled to?
While there are minimum standards for notice pay set out in federal and provincial employment legislation, most employees are usually entitled to more than these minimums. Some important exceptions to consider when looking to calculate your notice pay in Ontario are whether you are a minimum wage or transient worker, the duration of your employment, if you have signed a pre-negotiated severance agreement (often found in employment contracts with clauses that state the exact amount of notice to be paid upon termination), and if you work in a federally regulated industry such as banking or air transportation.
Many employees who have recently lost their jobs believe that simply receiving any amount of notice pay means that they have been properly compensated for their termination. However, with the number of factors involved in determining the appropriate common law notice, it is always advisable to speak to an employment lawyer first prior to signing any package that has been offered.
Severance pay calculators
You may have seen a wide variety of online severance pay calculators or notice pay calculators offering to determine what you are owed when you are wrongfully dismissed in Ontario. Keep in mind that these calculators provide general information only and cannot account for all the specifics of your employment circumstances. Since severance pay or notice pay varies depending on your province of residence and the type of job you had, accurate calculations require an understanding of provincial regulations, important exceptions, and the terms of your employment.
For accurate and personalized information on how much you are entitled to in Ontario, including common law factors that may increase the appropriate notice, don’t rely on severance pay calculators or notice pay calculators found online. Contact one of our employment lawyers to ensure that you receive the proper severance package for your specific situation.
Employment lawyers and severance packages
There are a variety of options available to employees following termination, and a variety of exceptions depending on which industry you are employed in.
In addition, most dismissed employees are simply unaware that they may be entitled to notice pay that exceeds the minimums found in the Employment Standards Act. An experienced employment lawyer can always work to ensure that your payment for common law notice is maximized for wrongful dismissal either through a court action or negotiated settlement.