What exactly is severance pay ontario
severance pay ontario
If you are a laid off employee in Canada, you may be entitled to both termination and severance pay. Often, these terms are used interchangeably but technically they are not the same. This article from Walter Law Group discusses severance pay ontario and termination pay – two different types of compensation that employers in Ontario owe to employees if they are terminated without cause.
The Employment Standards Act (ESA) stipulates that an employer must provide a dismissed employee with compensation. However, that is only if the employer did not have “cause” to terminate an employee, which means more than one misstep and that a worker has been given the opportunity to correct his or her conduct before firing them. Even with a contract, employers in Ontario can still be required to pay an employee working notice or compensation in lieu of notice if the employer does not have cause for dismissal, she explained.
Typically, a severance package will include not only the wages that an employee is owed by their employer but also any benefits, bonuses, car allowances, commissions or other payments. The amount of a severance package will depend on a number of factors including years of service, position, and the circumstances surrounding the job loss. It also depends on the size of the company – larger companies are required to provide greater amounts of severance pay Ontario to their employees than smaller companies.
What exactly is severance pay ontario
Severance pay ontario is usually paid out within seven days after the employee’s employment is severed or on what would have been the next regular pay day, whichever is later. However, an employer may decide to pay severance pay in installments with the electronic or written agreement of the employee and the approval of the Director of Employment Standards, Ministry of Labour, Immigration, Training and Skills Development. An installment plan cannot last for more than three years.
If an employer is not paying their employees the statutory minimums of termination and severance pay, the former workers can file a claim with the Ministry of Labour, she explained. If they win their case, the employer must immediately pay the severance pay owed, she added.
Employees who believe they have not received the severance pay owed to them or have been wrongfully denied severance pay have the right to seek legal remedies through the Ontario Ministry of Labour or through civil litigation. Employers found to be in violation of the ESA may face penalties, fines, or other legal consequences.
Stacey R. Ball, a Toronto employment lawyer, explains that an employee is generally entitled to severance pay in addition to their regular wages and overtime. If the employee did not sign a severance pay clause in their contract, they are only entitled to the statutory minimums outlined above. “It is important to get advice from a qualified employment lawyer when discussing any severance pay issues,” she said. “Employment law is complex and the consequences of not knowing the rules can be costly.”