As an employer, how do we know how much severance is reasonable to dismiss a long-time employee? Our executive assistant is 40 years old, and has been with us for 10 years. But she is not able to support our team adequately now, as our work has shifted recently – we require someone who is able to be an assistant and do research.
THE FIRST ANSWER
Partner at Whitten & Lublin employment lawyers, Toronto
Reviewing precedents is the best way to get a sense of what is fair. A lawyer can review old cases with similar facts to see what types of severance packages judges are handing out. From my review of past cases, a 40-year-old executive assistant with 10 years' tenure should probably receive somewhere in the range of six to seven months' pay.
But as always, this will depend on a couple factors.
How long did it take or how long should it have taken the assistant to find another job is very important to a judge's assessment of what is fair. Also, keep in mind that, except for any statutory requirements, which are unconditionally owed, severance is only payable during the period of time when someone is out of work and reasonably looking for another job.
So if she found another job after five months that paid her approximately the same wage as she earned with your company, you would technically only owe her five months' severance. Her possible re-employment should be addressed in your termination letter and the offer of severance.
THE SECOND ANSWER
Canadian human resources executive based in AtlantaThe general rule for severance is to provide two or three weeks per year of service. In cases where the job search period might be longer than normal, up to four weeks per year of service might make sense. Decisions concerning severance should be consistent with prior, similar terminations.
You should also consider any special circumstances for which it might make sense to mitigate with additional payments. It is best to consult an attorney.
It is equally or perhaps more important for you to consider how you are addressing your organization's need for new or improved skills and to consider the implications of those actions.
You state that your executive assistant currently does not have the skills to support the team, and thus, you are terminating her employment.
Have you offered to train her and help her develop new skills? Could you hire a junior researcher, then keep the executive assistant, add more administrative work to her role, taking it off the plates of others who could focus on more complex, value generating work?
How will other employees view this termination?
Will they see it as a pragmatic business decision? Or will they see it as a lack of empathy for people and inability or unwillingness to train and retain loyal talent?
Remember, you are not just terminating the executive assistant, you are also terminating the friend and colleague of other employees.
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