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ASK AN EMPLOYMENT LAWYER

How do I know whether my severance is fair? Add to ...

THE QUESTION

I was fired and given two months’ salary as severance. I worked for the company for a year. Is the severance package fair?

THE ANSWER

The fairness of a severance package is based on your tenure, your age, your position and responsibilities, and how long it should take you to find a comparable job. Most importantly, courts consider the precedents, which are previous cases where judges have awarded severance for someone with similar characteristics. Even short-term employees can be awarded significant severance if they held senior roles or are older.

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THE QUESTION

I’m an engineer who has been working for a high-tech company for three years. I’m in my mid-40s, and have more than 20 years of experience. My employer is terminating me without cause, along with six other engineers, as a result of work force reduction. The severance package they are offering is nine weeks base salary as per my employment agreement (three weeks of salary per year of employment.) The company is “legally” meeting their minimum obligation, right? What should I do?

THE ANSWER

You should not assume your contract limits you to three weeks’ salary for each year. Not all employment contracts properly comply with the law. In this case, your personal circumstances can be considered by a judge in determining your severance. Begin by having your contract reviewed to determine whether the clause is legal.

THE QUESTION

My husband, a subcontractor for a transportation company for 18 years, was given one day of notice and let go, along with all other employees. The company says he is not entitled to severance because he is a subcontractor. What is the legal stance on this type of dismissal? Should there be notice provided or termination pay from the employer?

THE ANSWER

Normally, contractors are not entitled to the same severance as an employee. But there are exceptions. Courts will consider a contractor’s tenure and true independence to determine whether the situation is akin to employment. This means that, despite however your husband and his employer viewed their relationship, the courts could deem him an employee. The longer a contractor works for one company, the greater the likelihood he would be awarded some severance, even if all other factors suggest otherwise.

Daniel A. Lublin is a partner at Whitten & Lublin, employment and labour lawyers. Reach him at Dan@canadaemploymentlawyer.com

Follow on Twitter: @danlublin

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