Deciphering Notice and Severance Rights: Navigating Layoffs in Today's Economy

In the current economic climate, where layoffs have become increasingly common, understanding your rights regarding notice and severance is more important than ever. Whether you're facing the possibility of losing your job or seeking clarity on your entitlements, knowing the rules can make a significant difference in your financial security during these uncertain times.

These concepts can be confusing for the layperson – for example, Ms. Humphrey was employed for 3 years when her employment was terminated without cause. Under the ESA, her entitlements would be 3 weeks. The court found that Ms. Humphrey’s contract provided her with entitlements upon termination that fell below the ESA, so it declined to enforce the termination provision, relying instead on the common law to determine that Ms. Humphrey was entitled to 12 months’ notice. Determining how the court made the jump from 3 weeks to 12 months can be confusing – it is important to first understand the basics.

Employment Standards Act (ESA) Notice and Severance:

If you're facing a layoff, it's crucial to know the basics laid out by the Employment Standards Act (ESA). This legislation sets minimum standards for how much notice your employer must give you before letting you go. For example, if you've been working for more than a year, your employer typically has to give you at least one week's notice. For longer tenures, the notice period can be significantly longer.

Severance pay is another consideration. According to the ESA, you might be entitled to severance pay if you've been with your employer for a certain period and are let go without a valid reason. This payment is additional compensation meant to ease the financial burden of sudden unemployment, particularly if you've dedicated several years to your employer.

Contractual Notice and Severance:

Beyond the ESA, your employment contract may specify different rules regarding notice and severance. These contractual agreements can offer you more generous terms than what the ESA mandates. For instance, your contract might stipulate a longer notice period or higher severance pay than the statutory minimums.

It's essential to review your employment contract carefully to understand your entitlements in the event of a layoff. By knowing what's outlined in your contract, you can better advocate for your rights and ensure you receive fair treatment during the termination process.

Common Law Notice and Severance:

In addition to statutory and contractual entitlements, common law principles also play a role in determining notice and severance pay. Courts may award more generous terms based on factors like your length of service, age, and the availability of comparable employment opportunities.

Understanding common law can be particularly beneficial if you believe you're entitled to more notice or severance pay than what's provided by the ESA or your contract. Seeking legal advice can help you navigate this aspect of employment law and ensure you receive fair compensation for your circumstances.

In conclusion, as layoffs continue to impact individuals across various industries, it's essential to be aware of your rights regarding notice and severance. Whether governed by the ESA, your employment contract, or common law principles, understanding the rules can empower you to navigate this challenging period with confidence and advocate for fair treatment in the workplace.

About the Author:?

Tahir Khorasanee is a Senior Associate at Steinbergs LLP. With a focus on labor, employment, human rights, and commercial litigation matters, he represents companies across Ontario. Tahir is dedicated to advocating for access to justice, assisting employees in negotiating fair severance, and representing them in wrongful dismissal claims. Tahir is the incoming President of the Employment Lawyers Association of Ontario.