lost with Federally Regulated Employee severance pay
If you’re a federally regulated employee, you have the same job security as employees in a provincially regulated workplace — unless you sign a contract limiting your rights. This means that when your employer decides to lay off workers, they must provide a full severance package and reasonable notice. If they don’t, you could file a claim for wrongful dismissal with the Canada Labour Code (CLC).
A severance package is the total amount an employee is entitled to receive when he or she is laid off from his or her employment. This includes any termination pay and the value of any benefits that you’ve earned over the course of your career with the company. These include a pension, life insurance, vacation pay and sick leave.
Your Federally Regulated Employee severance pay is calculated using the formula set out in the Employment Standards Act (ESA) in Ontario, which takes into account your regular weekly wages, excluding overtime. Then, it adds on one week’s pay for each year of service up to and including ten years of service, plus two weeks pay for each full year of service beyond 10 years of service. It also adds on 2.5 percent of your basic severance allowance for each year that you’re over 40 at the time of separation.
Can bonuses be lost with Federally Regulated Employee severance pay?
This is on top of your statutory termination entitlements. The new laws that came into effect in February require employers to give up to eight weeks of notice or pay in lieu of notice to individual employees when they’re dismissed without cause, says Trevor Lawson, a partner at McCarthy Tetrault LLP in Toronto. This represents a trend towards modernizing the ESA with an eye to fairness and better protections for employees, he adds.
If you’re a permanent, full-time federally regulated employee, you cannot be laid off without severance pay. However, if you’re a temporary or part-time worker, you may be eligible for federally regulated employer severance pay if your employer lays off a large number of employees due to a shortage in work. If your employer has been impacted by the COVID-19 pandemic, it’s possible that you could be at risk of being laid off temporarily. In this case, your employer may choose to implement a temporary layoff policy for their staff.
However, it’s important to note that you can only be laid off in accordance with the terms of your employment contract, if applicable. In order to be terminated, your employer must provide reasonable notice or pay in lieu equivalent to the earning you would have received during the notice period.
For employers, complying with severance pay regulations is not only a legal requirement but also an opportunity to demonstrate corporate responsibility and commitment to their workforce. As the employment landscape continues to evolve, the importance of robust severance provisions will remain integral to maintaining a fair and equitable labor market.
Non-unionized employees whose positions are covered by the CLC are protected from being fired for any reason other than serious misconduct or because their position no longer exists, according to a 2016 Supreme Court decision. This is because the court ruled that they have similar job protection to employees in unionized environments.
