If you are a non-unionized employee in Ontario who is being terminated, then you may be entitled to a severance package. This can include both statutory minimum severance pay and common law severance pay. Severance packages can be worth tens of thousands of dollars and are designed to help you get back on your feet financially after being let go.
While the severance pay rules are outlined in the Employment Standards Act, or ESA, there are also some other rules that can influence how much your employer should give you when you are laid off. For example, if you have an employment contract that stipulates a higher amount of severance pay than the ESA minimums, then your employer is required to honor those terms and not merely provide you with the minimums set out in the ESA.
You can contact the Ministry of Labour to find out more about your rights and how much severance pay you should receive. They can also help you file a claim with the tribunal or court if your employer fails to meet its legal obligations regarding severance pay.
When you are severance pay Ontario, your employer must continue to fund any benefits that you would have earned had you been in employment during the notice period. This includes pension contributions, health and dental coverage and disability insurance. In some cases, companies will offer you bonuses and other forms of compensation as part of your severance package. Whether or not you are entitled to those will depend on the language in the bonus policy and case law in the province.
It is important to remember that severance pay does not cover any discriminatory reasons for termination, such as race, gender, age, sexual orientation, marital status, place of origin, religion, or disability. While you can be fired for almost any reason, employers need to have a good reason or pay you for not firing you (cause). If an employer dismisses you because of a discriminatory reason, they may owe you additional damages.
Aside from the minimum severance pay, your employer must also pay you any unpaid wages, vacation days or overtime you have accumulated. If you are being severanced, it is best to speak with an employment lawyer at Samfiru Tumarkin LLP as soon as possible, so we can advise you on the appropriate amount of severance pay you should receive.
You can receive your severance pay as a lump sum payment or it may be paid in installments. When you receive a lump sum, your employer will deduct income tax from the payment. This tax rate will depend on where you live in the country, how much your employer deducts and the total amount of your severance payment. It is a good idea to consult with an accountant when you are receiving severance pay in order to ensure that you do not overpay income tax. In the event that you do overpay, the Canada Revenue Agency will issue a refund to you.