Severance - got sacked

Preparing for life after work. RRSPs, RRIFs, TFSAs, annuities and meeting future financial and psychological needs.
Jo Anne
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Re: Severance - got sacked

Post by Jo Anne »

Flaccidsteele wrote: And if you have the financial wherewithal, after your severance is paid, you apply for EI and keep the time-off rolling for another 10 months.
Actually, you are supposed to apply for EI immediately after losing your job, regardless of whether or not you are receiving severance pay. The EI payments will begin after the severance period is over. Been there, done that.
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Re: Severance - got sacked

Post by ockham »

Jo Anne wrote:
Flaccidsteele wrote: And if you have the financial wherewithal, after your severance is paid, you apply for EI and keep the time-off rolling for another 10 months.
Actually, you are supposed to apply for EI immediately after losing your job, regardless of whether or not you are receiving severance pay. The EI payments will begin after the severance period is over. Been there, done that.
To add to this, in the case where your EI payments have commenced prior to receipt of the severance payment, EI has a first claim against the severance amount to the extent of any payments it has already made. EI must be immediately reimbursed to that extent.

This is a huge litigation disincentive for those dismissed employees who qualify for EI. The litigation in effect operates as a collection agent for EI. It's true that EI then adds the time thus "bought back" to the end of the claim period, but it's the rare case where people are still without work after all that time.

As to some other comments upthread, "one month per year of service" is NOT a rule of law, it's a rule of thumb. Like all rules of thumb, it's a useful tool with which to start an analysis, but a poor tool with which to conclude an analysis. The reasonableness of notice periods is sensitive to issues like age, education, training/retraining, local economic environment, etc. There's no substitute for consulting a lawyer in any case that's halfway serious.
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Re: Severance - got sacked

Post by OhGreatGuru »

In Ontario, employers are required to give a notice of termination of 1- 8 weeks (depending on length of service), at full pay; or alternatively they can give no notice if they make a lump sum termination payment for the same amount. This is separate from, and in addition to, the legislated amount of severance pay. i think the trend is to make the lump sum payment, rather then having a terminated employee hanging around lowering morale and possibly sabotaging the company.
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Re: Severance - got sacked

Post by Flaccidsteele »

Jo Anne wrote:
Flaccidsteele wrote: And if you have the financial wherewithal, after your severance is paid, you apply for EI and keep the time-off rolling for another 10 months.
Actually, you are supposed to apply for EI immediately after losing your job, regardless of whether or not you are receiving severance pay. The EI payments will begin after the severance period is over. Been there, done that.
This is of course, correct. There is a limited window to apply for EI. I had a brain fart. Happens often.

Long story short, my intent was to say that if a tenured individual can separate their identity as a human being from their job and is financially strong, the combination of severance + EI can make for a very nice time away from work to spend on other things that may be more important.
Last edited by Flaccidsteele on 28 Nov 2015 23:46, edited 1 time in total.
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Re: Severance - got sacked

Post by Flaccidsteele »

ockham wrote:As to some other comments upthread, "one month per year of service" is NOT a rule of law, it's a rule of thumb. Like all rules of thumb, it's a useful tool with which to start an analysis, but a poor tool with which to conclude an analysis. The reasonableness of notice periods is sensitive to issues like age, education, training/retraining, local economic environment, etc. There's no substitute for consulting a lawyer in any case that's halfway serious.
ockham is 100% correct.
retireat50 wrote:Have a friend going through this. 10 year employee offerred 10 weeks. His lawyer obviously told them to stuff it and its headed to court. The wrinkle is that they have dug up some emails allegedely showing insubordination and missed deadlines. I've seen the emails and they are borderline at best. They terminated him without cause and hence the severance offered. Why would they be gathering this evidence? Can they change their mind after the fact and claim he was let go with cause?? Didnt the offer of a severance default it to a without cause situation?
Aside from landlord/tenant, the employer/employee severance thing is heavily skewed in favour of the employee. The only advantage the employer has is fear. And it's actually a powerful advantage and they're going to use it. And why not? Some employees are paid a lot of $ and have a lot of tenure.

As I said before, the combination of job loss/finances/legal action hitting simultaneously can induce a lot of fear. And it works.

Consult an employment lawyer.

Any employment lawyer who has been in business for awhile can tell you stories where you would swear that the employer has the case won, but didn't. Some of these stories are truly ridiculous.

As I mentioned in another post, some individuals have a lot of tenure and are due a significant amount of severance. Personally I think it's worth it.

In fact, I would say that whenever money is involved, you should consult a lawyer. Especially considering that the LSRS offers 30 minute free consults.
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Re: Severance - got sacked

Post by Chuck »

Flaccidsteele wrote: Aside from landlord/tenant, the employer/employee severance thing is heavily skewed in favour of the employee. The only advantage the employer has is fear. And it's actually a powerful advantage and they're going to use it. And why not? Some employees are paid a lot of $ and have a lot of tenure.
So it would seem. But isn't the landlord/tenant skew because it is legislated that way? It's not just a matter of case law tending to support the tenant is it? And yet that seems to be the case here. The courts seem employee friendly for no particular legal reason except tradition. I'm surprised all the presumably high priced corporate legal help can't win these cases.
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Re: Severance - got sacked

Post by ockham »

The idea that the law of Master and Servant (which is what employment law was called not long ago) is heavily skewed in favour of the servant is dubious.

In a non-unionized workplace, the employee serves at the pleasure of the employer. The only constraint on the exercise of the employer's pleasure is that the employer has a duty to give reasonable notice (or pay in lieu of reasonable notice) of termination.

Most employees actually need and rely on their regular paycheque. They need it to pay the groceries and to make their mortgage payment. They do not have the economic power to go without pay for three years while their wrongful dismissal case winds its way to trial.

Most employees, particularly those with longer tenure, take pride in their work. Their sense of self is to an extent, perhaps a large extent, tied to their job. (I know retired doctors who, years after retirement, still insist on making restaurant reservations in the name of "Dr. So-and-So"). Getting fired hurts, often deeply.

The dismissed employee is under a legal duty to search for work. They should expect to be cross-examined by experienced legal counsel for the employer about those search efforts.

There are exceptions, of course. But what I describe is the typical plight of those holding a pink slip.
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Re: Severance - got sacked

Post by Flaccidsteele »

ockham's post is pretty much perfect. The only thing I would say is that, unless someone can show me evidence that employment law doesn't favour employees, I can only go on my experience. It doesn't really prove anything, but that's all that I can go by. And I've only been involved in helping a small handful of co-workers go through it.

Always speak with an employment lawyer.

Also re: cross-examination re: job search. Personally I wouldn't worry about this. But again I would encourage others to speak to an employment lawyer about this if they have a concern about it.
Chuck wrote:So it would seem. But isn't the landlord/tenant skew because it is legislated that way? It's not just a matter of case law tending to support the tenant is it? And yet that seems to be the case here.
That's a good point.

Although some may argue that case law generally supports the tenant in landlord/tenant disputes as well?
Chuck wrote:The courts seem employee friendly for no particular legal reason except tradition. I'm surprised all the presumably high priced corporate legal help can't win these cases.
According to the employment lawyers I've spoken with, most corporations generally don't want to go to trial supposedly because the outcomes are less than ideal for the corporation. It seems to often settle during the first mediation (if not earlier).

Just to clarify, the favouritism for the employee over the employer is my biased opinion and based on limited experience and also likely inherited from my conversations with a few employment lawyers.

I encourage all readers who are going through this to speak with an employment lawyer. Never listen to me or anybody else who has little or no experience in employment law. Especially other employees. Other employees give the worst advice. Often their advice is a mirror of their fears and not very useful.

Even at a very early age, I noticed that many of my peers went out of their way to avoid being fired at all cost. As one who was always stupid enough to go against the grain, I decided to try and get fired as a teenager. At that time it was because I was going to quit my mall job anyway so I thought that it would be an interesting experience to try and get fired instead. My limited interest in this area evolved from there. And I found that most of the fear around getting fired wasn't as bad as my friends made it sound and most of the conventional wisdom around termination didn't appear to be true.

However, having said that, for better or worse, my identity as a human being has never been tied to my job. Jobs were a dime a dozen.
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Re: Severance - got sacked

Post by ockham »

Flaccidsteele wrote: Jobs were a dime a dozen.
Let's think about this statement for a moment. If it was generally true that "jobs are a dime a dozen", then employers would generally never pay more than the statutory minimum severance, period. Every dollar that the dismissed employee earns or should have earned during the notice period is subtracted from the final severance amount. If jobs are a dime a dozen, then the dismissed employee will be working, or should be working, throughout the notice period. This reduces the liability of the employer to nil.
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Re: Severance - got sacked

Post by hamor »

FWIW I've seen around 3 weeks/year as severance in banks, lawyers couldn't get more.
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Re: Severance - got sacked

Post by OhGreatGuru »

Further to my previous posts, there is:

a) termination pay (pay in lieu of notice of termination), with minimums prescribed by provincial law;
b) severance pay, with minimums prescribed by provincial law; and
c) common law, which is an assessment of what "industry norms" are, based on past practices. These are not prescribed by labour law. There are consultants who make their living providing clients with reports to negotiate with an employer for this. When handed a report from a competent consultant a sensible employer will usually agree to it rather than take their chances in court. But these "industry norms" are very specific to the particular industry; class of worker; their age; and other factors. It is impossible to say that "X no. of months is well below industry norms" when OP told us none of these details.

If there is a collective agreement, it supercedes all of the above, assuming it does not contravene a) & b).
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Re: Severance - got sacked

Post by Descartes »

OhGreatGuru wrote:Further to my previous posts, there is:

a) termination pay (pay in lieu of notice of termination), with minimums prescribed by provincial law;
b) severance pay, with minimums prescribed by provincial law; and
c) common law, which is an assessment of what "industry norms" are, based on past practices. These are not prescribed by labour law. There are consultants who make their living providing clients with reports to negotiate with an employer for this. When handed a report from a competent consultant a sensible employer will usually agree to it rather than take their chances in court. But these "industry norms" are very specific to the particular industry; class of worker; their age; and other factors. It is impossible to say that "X no. of months is well below industry norms" when OP told us none of these details.

If there is a collective agreement, it supercedes all of the above, assuming it does not contravene a) & b).
This is one of the more correct postings on this subject.

I would add that benefits must be continued over the notice period even if termination pay is provided in lieu of notice.
Also, an important factor is the size of the company: smaller companies are excluded from some/all of these requirements as specified in the labour law.
I take it that is not the case here with the OP but it is with little startups, for example.
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Re: Severance - got sacked

Post by boosh45 »

Just got sacked too...
Received notice of 5 months from now. Payment of 24 weeks on top of that with benefits running out 4 weeks after termination date. I've been there for 12 years and am 35 years old...fair? Should I be asking them to cover my benefits (RRSP/ medical) for the full severance of 24 weeks?
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Re: Severance - got sacked

Post by Flaccidsteele »

boosh45 wrote:Just got sacked too...
Received notice of 5 months from now. Payment of 24 weeks on top of that with benefits running out 4 weeks after termination date. I've been there for 12 years and am 35 years old...fair? Should I be asking them to cover my benefits (RRSP/ medical) for the full severance of 24 weeks?
Consult an employment lawyer. They would be better at working with you in order to determine if the offer is 'fair'.

Only speaking for myself (and I'm not a lawyer), is that as an employee, I would prefer not getting notice. But that's neither here nor there.
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Re: Severance - got sacked

Post by Flaccidsteele »

Flaccidsteele wrote:Any employment lawyer who has been in business for awhile can tell you stories where you would swear that the employer has the case won, but didn't.

In fact, I would say that whenever money is involved, you should consult a lawyer. Especially considering that the LSRS offers 30 minute free consults.
Court victory for Ontario couple sets new precedent for precarious workers
Now, in a precedent-setting victory for precarious workers across the province, the Keenans have challenged that designation — and won. They have been awarded $125,000 after a judge found Canac Kitchens misclassified their employment status and owed the couple 26 months notice. It’s the highest notice period ever awarded to a contractor in Canada.
Kudos to them for seeking legal remedy. Most Canadian employees in this situation would have walked away with nothing.
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Re: Severance - got sacked

Post by Flaccidsteele »

Canadian companies who don't learn, pay.

Ontario Judge Awards $100,000 in Damages to Terminated Employee
The employee in question, Tom Morison, was a salesman who had worked in furniture sales for a number of companies for the entirety of his working life. Morison was terminated by his employer, Ergo-Industrial Seating Systems Inc., in October 2012. At the time of his termination, he had worked at the company for more than 8 years, and was 58 years old.
8+ years of tenure but received notice damages equivalent to 14 months' notice.

This company decided to go full stupid and got dinged with "aggravated damages" as well as "punitive damages". Nice. They're in exclusive company.

Again, kudos to Tom Morison for taking this all the way to court. Most employees aren't able to get anything because they either quit, retire, resign, leave for another job or don't have the financial wherewithal to pursue wrongful dismissal.
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Re: Severance - got sacked

Post by Koogie »

Flaccidsteele wrote:Canadian companies who don't learn, pay.
8+ years of tenure but received notice damages equivalent to 14 months' notice.
This company decided to go full stupid and got dinged with "aggravated damages" as well as "punitive damages". Nice. They're in exclusive company.
Again, kudos to Tom Morison for taking this all the way to court. Most employees aren't able to get anything because they either quit, retire, resign, leave for another job or don't have the financial wherewithal to pursue wrongful dismissal.
Not the way I read it. ""Despite Justice Roger’s finding of bad faith, he did not award aggravated damages.""

That whole story smelt a little fishy to me. From both sides.

I know as an employer we have to be careful. Damn careful. Better to err on the side of caution and overpay departing employees, even those who don't deserve it. Sometimes especially those who don't deserve it.

Much like the Landlord/Tenant situation in Ontario, we often feel as employers that the laws are stacked against us like they seem to be against landlords. That feeling is what has always made me avoid residential landlording and frankly, we don't take on any more employees than absolutely necessary anymore either.
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Re: Severance - got sacked

Post by Flaccidsteele »

Koogie wrote:Not the way I read it. ""Despite Justice Roger’s finding of bad faith, he did not award aggravated damages.""
Ah my bad. He sued for aggravated damages but did not receive them. Good catch.
Koogie wrote:Much like the Landlord/Tenant situation in Ontario, we often feel as employers that the laws are stacked against us like they seem to be against landlords. That feeling is what has always made me avoid residential landlording and frankly, we don't take on any more employees than absolutely necessary anymore either.
I think that's a fair position to take. Ontario is tough on employers and landlords.
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Re: Severance - got sacked

Post by Flaccidsteele »

I think the advice at the bottom for employees is good:
RousseauMazzuca LLP wrote:An employer is allowed to terminate or fire an employee in most cases, and generally does not need to have a good reason for the termination. In almost all instances, the employer must provide the terminated employee with either advance notice or payment (and sometimes both). This is known as reasonable notice or severance.

Many employees accept less reasonable notice/severance than they should. Many employees are also unaware that they may be entitled to additional payments, depending on the circumstances surrounding their termination.

If you have been terminated, it is essential to meet with an employment lawyer before you sign any documents or accept any severance packages from your employer. You may be entitled to much more money than the employer provides you in its initial offer. You may also be entitled to additional payments based on how the employer may have handled your termination.
Although I think it's true that many employees accept far less reasonable notice/severance than they should, I think it's also true that many employees don't have the financial wherewithal to wait around for a settlement.

However, having said that, I don't see why a personal with financial means, should forfeit the full amount of what they're due. Especially in a system as generous as Ontario.
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Re: Severance - got sacked

Post by ghariton »

Being laid off is a very stressful process, especially if one is the chief breadwinner in a household.

By all means consult a lawyer before accepting a severance package. The $250 or so can be well worthwhile. But pushing matters beyond an exchange or two of lawyers letters is tricky. You need to include the emotional cost, as well as financial costs and potential gains. This, in addition to the stress of the layoff itself and the hunt for a replacement for your job (another job or self-employment).

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