What Happens If an Employer FAILS to Provide Severance Pay Ontario?

Employer FAILS to Provide Severance Pay Ontario

When it comes to employment law in Ontario, severance pay ontario is often a topic of confusion and debate. There are a lot of misconceptions around what is actually considered “severance pay” and what isn’t, and it can be difficult for employees to figure out what their rights really are.

The good news is, if an employee is fired from their job and receives a severance package, the employer must be in compliance with certain laws and regulations. Typically, these include the Employment Standards Act (ESA) and if the employer works in a federally regulated industry, such as banking or air transportation, they may be subject to different labour laws.

In Ontario, severance pay Ontario can be broken down into two categories: common law and statutory. Common law severance pay is payment in lieu of notice and is typically higher than statutory severance pay. Statutory severance pay is one week’s pay for each year of service and is the minimum requirement under the ESA.

What Happens If an Employer FAILS to Provide Severance Pay Ontario?

Generally, a severance package is a bundle of different forms of compensation and is meant to give the terminated employee a fair amount of money based on their length of service with the company and any other factors that are relevant, such as age and difficulty of finding new work. A severance package can include wages, benefits, commissions and other entitlements. Some employers also include a letter of reference which can help an employee in their search for new employment.

Employers are required to provide severance pay in Ontario to employees who have been involuntarily terminated from their job, unless the reason for the termination is not a protected reason under the Employment Standards Act (ESA). The maximum severance pay an employer can be required to pay is 26 weeks of regular salary. This is a minimum and some employers may provide more than this amount, depending on the size of their company and other considerations such as length of employment or difficulty of finding a new job for the terminated employee.

The ESA stipulates that an employee must be paid severance pay within seven days after the severing of their employment or on what would have been the next regular payday, whichever is later. Some employers may choose to pay severance in installments with the approval of the Director of Employment Standards at the Ministry of Labour. In these cases, an employer is required to pay the employee all of their severance pay within three years.

For most employees, a severance package is enough to tide them over until they find a new position, but it’s important for any employee who thinks they may not be receiving the right amount of money in their severance package to contact a Toronto Severance Pay Lawyer for advice. Stacey R. Ball is an experienced Toronto employment lawyer who can assist with all matters pertaining to severance packages and other wrongful dismissal issues. To learn more about what you might be entitled to if you lose your job, contact her office today to schedule a consultation.

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