Can Severance Pay Ontario Be Based on Performance?

Severance Pay Ontario Be Based on Performance

The loss of a job is one of the most stressful life events an employee can experience. Whether the termination was expected or not, losing your job can cause a flood of emotions that is hard to handle, especially when you have to figure out where you’ll work next and how to pay your bills in the meantime.

Fortunately, in Canada, most non-union employees are entitled to some form of compensation upon being terminated by their employer. This is called severance pay Ontario and it’s intended to help you get on your feet after being fired. If you’re a provincially regulated employee, the Employment Standards Act (ESA) guarantees that you’ll be paid severance of one week per year of service up to 26 weeks.

However, some employers try to reduce or eliminate this minimum requirement through poorly-worded termination clauses in their employment contracts. These clauses are usually unenforceable, as they do not comply with provincial laws on termination. A Toronto severance pay lawyer can use various factors to determine what your entitlement should be under common law, and then negotiate with your employer to ensure that you receive the correct amount when you are terminated.

Can Severance Pay Ontario Be Based on Performance?

While performance is an important factor in determining what you should be paid as severance, your employer cannot base severance on the fact that you have not performed to their expectations. This is because severance pay is not a bonus payment, but rather an amount you are owed in lieu of notice if you’re dismissed without cause.

To be eligible for severance pay, an employer must meet a few criteria. First, the company must have at least 50 employees and a global payroll of $2.5 million Canadian or more. Second, the employee must have at least five years of employment with the company. Finally, the company must be terminating the employee as part of a group of at least 50 or more employees being laid off within six months.

The Ministry of Labour has outlined the minimum rules for severance pay in Ontario, but there are many additional factors that go into determining what an individual is owed. An experienced severance pay lawyer at Samfiru Tumarkin LLP can use various laws and factors to determine what you’re entitled to, then use that information to negotiate with your employer.

If you are offered severance pay that is significantly lower than what the ESA mandates, do not accept it. Instead, contact Stacey R. Ball, an experienced severance pay lawyer in Toronto, for advice. She can explain how the law works and the different factors that go into calculating an equitable severance package. She can also advise you on whether or not your employer has a bonus policy that applies to you and how this could impact your severance offer.