I just lost my job – can I get severance?

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I just lost my job – can I get severance?
Published December 8, 2014
By Lawrence Smith & Daniel Sorensen

Have you just lost your job? Are you concerned that your employer might let you go? If so, you should aware of your entitlements.

Usually, when an employer lets an employee go without just cause, the employee is entitled advance notice of their employment being terminated. During this time, the employee generally must continue to work. Advance working notice is frequently referred to simply as notice.

Where an employer fails to give the employee advance working notice of their dismissal, the employer usually must give the employee pay in lieu of such notice. Pay in lieu of notice is often referred to as severance.

Employees should be aware that an employer does have the option of providing the employee with a combination of working notice and severance.

When determining severance, it is usually considered in terms of time rather than a monetary sum. This is because severance is based upon the notice an employee should have received.

So if you are entitled to notice or severance, how much notice or severance are you entitled to? In British Columbia, the Employment Standards Act sets out minimums for notice and severance. For federal employees, the Canada Labour Code sets out minimums for notice and severance. You should be are that the Employment Standards Act and the Canada Labour Code only set minimums. In practice, and subject to an employment contract, employees are often entitled to notice or severance exceeding that set out in the Employment Standards Act or the Canada Labour Code.

In practice, the notice or severance entitlement is determined by reference to precedent. This means by reference to previous court decisions. In court decisions, employees are often entitled to notice or severance exceeding the minimums in the Employment Standards Act or the Canada Labour Code.

When determining notice or severance entitlements, the most useful court cases are those dealing with employees similar to the employee in question. When looking at cases dealing an employee similar to the one question, there will typically be a range of severance awards that can be used to predict the severance entitlement for an employee.

In decisions on notice and severance entitlements, Courts have considered four main factors as follows:

  • the employee’s length of service
  • character of the employment
  • the employee’s age, and
  • the availability of alternative employment.

Generally speaking, courts have tended to make more generous notice or severance determinations for employees that have a longer length of service, or more responsibility in their employment.

You should be aware that if you have been let go from your employment, and you are seeking severance, then you have a duty to mitigate. The duty to mitigate requires you to take reasonable steps to acquire new employment. If you find new employment during the time you are entitled to pay in lieu of notice, then your income from that new employment may reduce your severance entitlement. You should also know that if you fail to make adequate efforts to look for new work, then a Court could penalize you by reducing the amount of severance to which you are entitled.

Finally, you should be aware that notice and severance entitlements can be decided by the use of an employment contract between an employee and their employer. Subject to a small number of exceptions, the courts usually enforce these contracts.

Like contracts, for unionized employees, their notice and severance entitlements are usually determined by reference to the collective agreement. If a collective agreement is silent on notice or severance, then the minimums under the Employment Standards Act or the Canada Labour Code will frequently apply.

As mentioned above, employees dismissed for reasons other than just cause are usually entitled to notice or severance. However, if there is just cause for the dismissal of an employee, then that employee is not entitled to notice or severance. So what constitutes just cause? That long discussion will have to wait for future blog posts.

If you have been dismissed or believe you are about to be dismissed, please contact us today to set up a consultation.