In most cases, the short answer is yes.
Most employees know they are entitled to notice or pay in lieu of notice when they are terminated from their job without cause. Pay in lieu of notice is often called severance pay or termination pay. There are legal distinctions between these terms, but the distinctions usually don’t matter. Most people just want to know how much notice or money they’re entitled to.
Understanding Your Employment Entitlements
The Employment Standards Act (“ESA”) in Ontario sets out the minimum notice or severance/termination pay an employee is entitled to (usually one week for every year of employment, but sometimes two weeks). However, most employees are entitled to more than the ESA minimums.
Why Employees Should Be Cautious When Offered Release Agreements
Many employers attempt to shortchange terminated employees. They will encourage employees to sign a release, often under the pretense the amount being offered is more than the ESA minimums. This is often misleading. The courts in Ontario have been clear the ESA sets out only the minimum entitlements terminated employees are entitled to and most employees are entitled to more than the minimums. Two exceptions to this include situations where the court finds the employee could have secured reasonably comparable employment during the ESA minimum notice period, or there is an “enforceable” termination clause in the employment contract limiting the employee to the ESA minimums. That said, it should be noted many termination clauses are NOT enforceable.
How Much Notice or Pay in Lieu of Notice are Employees Entitled to?
There is no set formula under the common law (judge made law). It depends upon several factors, including the nature of the employment, length of employment, employee’s age, availability of similar employment, and the employee’s experience, training, and qualifications of the employee. It can often be equal to several months’ worth of pay, with 24 months usually being considered the maximum, absent rare and special circumstances. Some lawyers will use one month per year of employment as a starting point, and then adjust up or down depending upon other factors. Experienced employment lawyers are equipped to provide an estimate on overall entitlement. This estimate forms the basis for settlement negotiations before a lawsuit is necessary, or even recommended.
Secure the Severance Pay You Deserve
If you believe that you are entitled to more severance pay than your employer is offering, then please do not hesitate to contact us directly for a free employment law opinion.
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