Legal Cases Influence Federally Regulated Employee Severance Pay
In Canada, non-unionized workers in federally regulated industries (banks, airlines, telecommunications, etc.) are governed by the Canada Labour Code, or CLC. This includes severance pay. CLC entitles employees to at least two weeks of notice or pay in the event of their dismissal without cause. The CLC also lays out severance package entitlements in the event of mass layoffs.
However, the law governing the termination of these workers is complicated. Many employers are attempting to save money by terminating their employees with minimal or no notice, and by limiting severance packages. These actions could be illegal. In the case of Waksdale v Swegon North America, a ruling from the Ontario Court of Appeal may force some of these employers to amend their contracts or face legal action.
The Canadian courts have ruled that in the absence of a collective agreement, non-unionized, non-managerial employees are entitled to Federally Regulated Employee severance pay if they are terminated for no cause or if their employer terminates them with an immediate effect without giving them any notice at all. The law also requires that all severance packages include any vacation pay earned and all the pay an employee has been paid in the last three months of employment.
Can Legal Cases Influence Federally Regulated Employee Severance Pay?
While some people may assume that the bank employee severance package offered by their employer is reasonable based on a rule of thumb suggesting one month’s pay for each year of service, federally regulated employees who have been unfairly dismissed might be able to prove they are entitled to significantly more. Moreover, the rules governing the severance package of bank employees are particularly complex and can change from time to time.
Many people do not know that the law requires that severance agreements be written in a way that makes them easy to understand. Typically, this means that they should not contain technical jargon or long, confusing sentences. It is important to have an experienced employment lawyer review a severance agreement before signing it. An attorney can help make sure that the severance agreement does not ask you to waive your rights to file a claim or settle a lawsuit, and that it is in line with your overall financial circumstances.
In addition, an attorney can advise you on whether or not the severance agreement is fair in light of your employment history and other factors, including your health and family situation. Finally, an attorney can ensure that your severance agreement provides you with enough money to cover your expenses while looking for a new job. Additionally, most severance agreements specify whether payments will be delivered as a lump sum or in installments, each option offering unique advantages and drawbacks in terms of taxation and personal financial management.
In addition, a federally regulated employer that has been convicted of violating the Worker Adjustment and Retraining Notification Act can be fined under the Act. This can provide an incentive for an employer to negotiate a more generous severance package for those who are affected by the WARN Act.
