Important Additions in a Severance Package

| December 21st, 2016 | No Comments »

severance package calculateThe purpose of a severance package is to make a terminated employee “whole” over a reasonable period of time.  Very commonly, severance packages include only base salary, neglecting other elements of compensation – such as benefits, RRSP or pension contributions, bonuses, commissions, and so forth.  If a severance package excludes any of these elements, the employee ought to speak with an employment lawyer.

Sometimes, the missing elements of severance packages are subtle.  For example, many benefit schemes include more than just health and dental coverage – they also often include life insurance, long-term disability coverage, critical illness, a health spending account, and the like.  Each of these items has a dollar value – whether it’s the company’s cost or the replacement cost.  Where the severance package offers health and dental continuation and nothing further, the extra cost of these missing items needs to be accounted for in some other way in order to make you “whole”.

Bonuses are also a major bone of contention in severance package negotiations.  The Ontario courts have been very clear recently that bonuses which would have been earned during the severance period must be included in a severance arrangement, unless the company has communicated very clear language to the contrary through its bonus plans and/or employment contracts.  Employees ought to remember that in severance negotiations there are often two different bonus issues: 1) the bonus earned during the year of the termination; and 2) the bonus which would have been earned if not for the termination.  Both these elements are up for negotiation.

Finally, it is very common to negotiate non-monetary items into a severance package, such as a reference letter, employment transition counselling, and reeducation allowances.  Although companies generally do not have to offer these items, some companies include them anyway, if they feel it could provide value to the departing employee.

 

Author: Daniel Chodos, Employment Lawyer

Two Years of Severance Awarded to Dedicated Employee

| September 26th, 2016 | No Comments »

severanceDaniel Lublin was once again successful in obtaining one of the lengthiest severance awards for an employee in Ozorio v. Canadian Hearing Society.

The Court awarded our client 24 months payment of salary and benefits following her termination and entirely accepted our position that even with our client’s competence and experience she would have a difficult time obtaining a similar job.  The Court accepted our position that 30 years of service and a dismissal at age 60 ought to result in a significant severance payment and mentioned that our client was justified in declining a 1 year severance package which the employer ought to have known was insufficient.

With respect to our client’s dedicated service the Court concurred that her lengthy period of employment was likely to be a serious impediment in finding another job.  Specifically, having virtually no work experience outside of that obtained through her former employer placed our client at a competitive disadvantage in obtaining new employment.

Further, this was yet another Whitten & Lublin decision where the Court agreed with our view that an employee 60 years of age or older must be entitled to greater severance.  The Court cited our past cases of Hussain v. Suzuki Canada Ltd. and Leeming v. IBM Canada Ltd. to confirm that “age is an impediment” for older worker’s seeking new employment.  Simply, the job market is difficult for older workers competing with younger, more recently trained and likely less expensive talent.

If you have been dismissed consider consulting the experts at Whitten and Lublin for an informed assessment of your severance.

Author: Paul Macchione, Whitten & Lublin

The consequences of avoiding to pay a dismissed employee with a severance package

| November 16th, 2015 | No Comments »

Employers should be careful when fabricating an allegation of cause for termination in order to avoid paying a dismissed employee with a severance package.  A recent decision confirms that these allegations can expose employers to increased cost consequences.

The ordinary rule is that an unsuccessful party to a lawsuit pays around 60% of the successful litigant’s legal costs.  However, in Tetra Consulting and Lewis Cassar v. Continental Bank of Canada and Continental Currency Exchange Canada Inc., 2015 ONSC 6546 – a case that we recently argued on behalf of the plaintiff employees – the court ordered Continental Bank of Canada (“CBC”) pay the plaintiffs not only a proper severance package, but nearly all of their legal costs.

The court found that CBC’s unfounded allegation of cause for terminating the plaintiffs made their case more difficult than it should have been, thereby increasing their legal costs.  The principles of justice favoured providing the plaintiffs with nearly complete indemnification for having to litigate the unfounded allegation.  They were awarded costs in the amount of $42,394.26.

Knowing which strategies to use, and not use, can be difficult in wrongful dismissal cases.  Employers, and employees alike, are encouraged to consult with an employment lawyer to minimize their potential liability and avoid a humiliating loss at trial.

Author: Ozlem Yucel, Whitten & Lublin

Q&A: Forced retirement – is this allowed?

| August 17th, 2015 | No Comments »

QUESTION

Forced retirement, to some employers is one viable way of making space for a new hire.  To other employers, insinuating and making comments about forced retirement can land them in a law suit.  It is not uncommon for an employer to want a ‘young’ hire for their business and even less common for the employer to come up with ways to dismiss their senior employee in an attempt to ‘make space’.  With this topic in mind, faithful readers of the Globe and Mail have asked whether or not it is legal to make comments insinuating that an employee should retire?

ANSWER

Toronto Employment lawyer, Daniel Lublin stresses the fact that a forced retirement is an illegal termination.  In cases where an employee is being hinted to retire, an employee may be entitled to a severance package and damages for age discrimination. In fact, senior employees who are considering receipt of a severance package can ask their employer. However, be forewarned that this can have consequences.  To know how to best handle retirement situations, you should consult with a lawyer at Whitten and Lublin Employment lawyers.

Read Daniel Lublin’s Globe and Mail column and full article Can I be forced into retirement?

Q&A: Working through your severance entitlement?

| July 20th, 2015 | No Comments »

QUESTION

An employee’s entitlement to severance is to say the least, at the discretion of the employer. But this is not a point blank answer, as there are many factors that play into effect. Where an employee is terminated and not offered severance, but asked to work until the end of employment, is an employer legally permitted to do this?

ANSWER

Entitlement to Severance

Toronto employment lawyer, Daniel Lublin most recently wrote his response in his latest Globe and Mail article. He states that this is in fact, legal. Employers have the right to choose between offering the employee payment in light of notice or providing working notice.  This concept is known as reasonable working notice of termination. In this circumstance, the employer is entitled, by law, to ask the employee to remain at work and carry out their job until the last date of employment.

Wrongful Dismissal

If your employer has specified an end date, and the working conditions and your pay remain the same, then it is legal to ask you to work until the last day of your employment. Although, if you believe that you were wrongfully dismissed, you should contact an employment lawyer immediately to help you with your case.

Read Daniel Lublin’s Globe and Mail column and full article I have to work through my severance. Is this legal?

Q&A: Independent Contractor Rights

| May 14th, 2015 | No Comments »

QUESTION #1

2 days after I submitted a written request for my 1st Quarter 2015 performance based compensation I was fired for no reason at all.  They told me “you are an independent contractor, so we don’t have to pay you”.  What are my rights in this situation?

ANSWER

You may have rights to severance in this situation, however, this will depend on whether you are truly an “independent contractor” from a legal perspective. Employees who are fired for no reason and without adequate notice are entitled to severance. By contrast,  independent contractors are not entitled to any severance (except what may be set out in a written contract). Merely because the company labelled you an “independent contractor” does not mean that the courts are bound by that label.  Even if you signed a written agreement that refers to you as an independent contractor, this is not determinative of your legal status.  The courts will examine not just what is simply written on paper or how the parties define each other, but how the parties actually carry out the working relationship.  In reality, very few contractors are truly independent contractors at law. Even if a company calls an individual an independent contract, an employment relationship has been nevertheless  found to exist in situations where the company exercises a high degree of direction or control over the individual’s work; the tools or equipment required to perform the work are provided by the company; most or all of the individual’s time is devoted to working for the company; and the individual is integrated into the company’s organizational structure. It is not necessary for all elements to be satisfied and this is not a complete list of examples, however, these are some of the main factors the courts will typically consider in clarifying the nature of your contractual relationship and your entitlements.

Separate from the above, you are entitled to be paid for outstanding earnings or performance-based compensation that was promised for work already performed, regardless of whether you are an employee or independent contractor. You should contact an employment law expert for advice about your legal status and your rights to a severance package.

Employee Work Skeletons Can Harm Future Employment

| April 16th, 2015 | No Comments »

Employees-beware of your work skeletons! Social media can be a good source for many things, even handy for employers to uncover employee work skeletons. Potential job candidates and employees need to be cautious about what they post and make public. More and more, employers are relying on this information and employees should be aware on how and when employers can rely on this information.

Toronto Employment lawyer, Daniel Lublin is an expert in the employment law field. His cautions consist of the following:

For employees

  • Upon termination- employees are still subject to allegations of misconduct; and
  • If your skeletons are severe and you cannot risk exposure- do not challenge your employer’s decision. Some employment skeletons can be more harmful than beneficial to both your case and your career.

For employers

  • When employee skeletons come to light following termination, it can be reason for a ‘just cause’ termination. Employers should consult with a law expert to find out their rights.
  • When employee misconduct comes to light and factors of this action affect the severance agreement, employers may be entitled to cease further payments. However, this is determined through tests that only an experienced legal professional can detect.

Read Daniel Lublin’s Globe and Mail column and full article Your old job skeletons can come back to haunt you

Affected by mass layoffs?

| January 22nd, 2015 | No Comments »

Recent events have caused mass layoffs of various employees, including Target, Suncor and SNC-Lavalin.  Employees affected are in the hundreds. Not knowing where to turn, most people resort to google searches. However, an internet search may be incorrect, misguiding, or may rely on a few factors. There are several factors that should be considered when determining an employee’s legal rights. These are usually based on a case-by-case basis.

Toronto Employment lawyer, Daniel Lublin knows all too well how a mass layoff can affect an employee. Below are the most common questions raised by dismissed employees:

1.         What is the difference between a layoff and a termination?

2.         Is it illegal for employees with less seniority than myself to receive more severance?

3.         Can I classify for employment insurance during a mass layoff?

4.         Following termination, should my benefits continue?

To read more questions and receive the full answer to these questions, read Daniel Lublin’s Globe and Mail Column and full article I’m part of a mass layoff. What rights do I have?

Age and severance packages

| January 14th, 2015 | No Comments »

Age has been noted as an important factor in determining severance.  When potential job candidates seek employment, chances are the younger candidate will have better chances of obtaining employment versus the older candidate. Readers of the Globe and Mail column asked, should an employee’s age be taken into consideration when an employer offers them a severance package? And how does this severance affect their Employment Insurance (EI) entitlement?

Daniel Lublin, Toronto Employment lawyer has answered these questions.  He explains that older employee’s should receive better severance packages. Realistically, this is not always the case. However, the Courts have been known to agree to this principal.  When it comes to EI entitlements, these benefits are paid to employee’s who are terminated without cause and are able to seek employment, but have been unable to find another job. Mr. Lublin explains that the benefit paid takes into account the severance payment offered.

Read Daniel Lublin’s Globe and Mail column and full article Should older workers get better severance packages?

Negotiating your severance package

| December 4th, 2014 | No Comments »

Negotiating severance can be done independently or with the assistance of an expert. When employees are laid off, knowing what steps to take and how to negotiate severance becomes all new territory. Employees often feel lost since they do not know what steps to take in order to determine whether or not they need to negotiate a fair severance package.

Daniel Lublin, Employment lawyer explains in his most recent Globe and Mail column that whether or not you should negotiate a fair severance package is dependent on how good or bad the initial offer is. It also depends on how comfortable the employee feels with asking for more. However, it is advised to negotiate with caution. When negotiating correctly, employees protect themselves from the risk of getting less than initially offered. This is why it is best to consult with an employment lawyer.

To read more on this topic and for the full Globe and Mail article Am I allowed to record conversations at work?