meaning of severance pay ontario
A severance package is compensation you may be entitled to after being fired or laid off. Employers in Ontario, including small businesses, large corporations, and federally regulated companies must provide their employees with minimum legislated severance when they are terminated. However, some employers attempt to use severance clauses in their employment contracts to restrict their obligation to pay more than the legal minimum. This practice is a violation of the Employment Standards Act (ESA).
If you’re non-union, provincially regulated and have at least three months of service with your employer, you are eligible for minimum statutory severance pay of one week per year of service, up to eight weeks. You can be paid this severance pay when you’re terminated with no cause, or your employer may choose to give you working notice or compensate you for not giving you the proper amount of severance pay.
The severance pay Ontario calculation is based on your salary, plus any bonuses and vacation time that you earned. It’s also important to consider other types of compensation that may be included in your severance package such as car allowance, commissions, and wages. Some employers will also offer you a transitional period to help you find new work, which can be worth as much as your severance pay.
What is the meaning of severance pay ontario
A company may also have to offer you a severance package if they terminate your employment for a reason that violates the Human Rights Code. The Code prohibits discrimination based on age, ancestry, citizenship, color, creed, disability, family status, gender identity, marital status, place of origin, race, sex, or sexual orientation. A severance package could include money for damages for discrimination.
Many people who have lost their jobs are unaware that they can request a fair severance package. The severance pay calculator on our website is a tool that allows you to calculate your severance pay in a matter of minutes. We recommend using the tool if you’re looking to determine your severance pay and if your employer has not provided you with the full amount that you deserve.
You can still request severance pay from your old employer long after you’ve been let go. The laws in Ontario and the rest of Canada state that your employer has a legal duty to pay you at least the minimum legislated severance package when you’re fired or laid off. However, some employers in Ontario and other provinces try to use severance clauses in employment contracts to restrict their legal obligation to pay more than the minimum. This is against the law and you can file a complaint with the Ministry of Labour.
If you’re not satisfied with the severance package that your former employer is offering, you can make a claim to the Ministry of Labour. The ministry will review your claim and if they find that you’re entitled to more than the minimum severance pay, they can approve an additional payment. However, if you don’t request the extra pay by the deadline, your entitlement expires.