Termination Pay: Why Do Long Service Employees Get More?
In Ontario, Canada, the termination of employment can be a challenging experience for both employees and employers. However, the province’s employment laws aim to provide certain protections and benefits to employees, especially those who have dedicated a significant amount of time to a company. One such benefit is the provision of higher termination pay for individuals with long service.
This article explores termination pay, why people with long service can receive more termination pay in Ontario, and what an employee can do if their employer fails to provide correct termination pay.
Termination Pay Entitlement
If an employee is terminated without cause, the employer must provide the employee with notice, either by providing working notice, pay in lieu of notice, or a combination of both.
The Employment Standards Act, 2000 (ESA) establishes employees’ minimum notice or pay-in-lieu requirements upon termination. Under the ESA, employees are typically entitled to a minimum of one week of notice per year of service, up to a maximum of eight weeks.
However, employees may have additional termination entitlements beyond the minimums stated in the ESA, known as common law reasonable notice.
Employees may be entitled to common law reasonable notice upon termination when an employment agreement lacks an enforceable termination clause. Common law reasonable notice encompasses the minimum ESA entitlements and often provides more generous notice periods.
Common law reasonable notice uses different criteria for determining the appropriate notice period. Instead of relying solely on an employee’s years of service, common law notice assesses the time it would reasonably take for the employee to find comparable employment, considering various factors, known as the Bardal factors. While not an exhaustive list, the court takes into account:
- The nature of the employment;
- The duration of the employee’s service;
- The employee’s age; and
- The availability of similar employment, considering the employee’s experience, training, and qualifications.
The court will also take into account other relevant factors when determining an employee’s common law notice period entitlements upon termination.
For employees, an experienced employment lawyer can help you determine how much you may be entitled to upon termination.
For employees, a litigation lawyer can help your business craft a termination package or defend against a wrongful dismissal claim.
Purpose of Higher Termination Pay
Long-service employees are generally entitled to more termination pay for several reasons:
- Providing increased termination pay to long-term employees acknowledges their dedication and loyalty to the organization over an extended period. It serves as a form of recognition and reward for their years of service.
- Employees with longer terms may face greater challenges in securing new employment due to their specialized skills, age, or reduced job opportunities. Enhanced termination pay provides them with additional financial support during the transition period, enabling them to bridge the gap between jobs.
- Long-service employees may face more significant difficulties in re-entering the workforce. By providing increased termination pay, the law aims to mitigate the potential adverse consequences of job loss for these individuals.
What Can You Do If Your Employer Fails to Provide Correct Termination Pay?
There may be instances when an employer fails to provide the correct amount of termination pay or neglects to fulfill their obligations. If you find yourself in this situation, there are steps you can take to address the issue:
- Review your Employment Contract
Begin by reviewing your employment contract, including any termination clauses or provisions related to notice or termination pay. Understand the terms and conditions that govern your employment relationship and your employer’s obligations.
- Communicate with your Employer
If you believe your employer has not provided the correct termination pay, initiate a conversation with them. Request clarification on the amount of termination pay or the reasoning behind the discrepancy. It’s possible that it could be an administrative error or a misunderstanding.
- Document the Issue
Keep detailed records of any communication or correspondence with your employer regarding the termination pay discrepancy. Note the dates, times, and individuals involved in the conversations. This documentation can be helpful if a lawsuit is started.
- Seek Legal Advice
If your employer refuses to rectify the situation or if you are unsatisfied with their response, consult with an experienced employment lawyer. They can assess your case, review relevant documents, and provide guidance on your legal options and potential remedies.
Higher termination pay for employees with long service in Ontario aims to recognize their loyalty, commitment, and dedication to their employers. It acknowledges the potential challenges they may face in finding new employment. By providing additional financial support during the transition period, enhanced termination pay helps bridge the gap between jobs for long-service employees.
In cases where an employer fails to provide correct termination pay, employees have options such as reviewing their employment contract, communicating with their employer, and seeking legal advice.
Understanding one’s termination pay entitlements and taking appropriate steps can help ensure fair treatment and adherence to employment laws in Ontario.
Whether you are an employer or an employee needing assistance with termination pay, our team of experienced employment and human rights lawyers at Achkar Law can help. Contact us by phone toll-free at +1 (800) 771-7882 or email us at [email protected].
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