Fair Treatment = Fair Amount for Severance Pay
Employers will usually just pay their employee severance pay instead of giving them a notice period. The amount is based on your salary payable for the length of the notice period. For without cause dismissals, an employer is obligated by law to pay set amounts for severance pay according to the Employment Standards Act, RSBC 1996 c. 113 which stipulates compensation as follows:
- 3 consecutive months of employment = 1 week of wages;
- 12 consecutive months of employment = 2 weeks of wages;
- 3 years of employment = 3 weeks wages;
- < 3 years = 1 additional week of wages per additional year to a maximum of 8 weeks.
But, the Employment Standards Act provides only the minimum standard for the notice period. You need to consult with a lawyer to better understand your rights and the correct amount of compensation you should receive.
The employer is not required to pay severance compensation if the dismissal is for cause.
The wages and compensation for the notice period is called “Severance Pay” and if taken to trial by a skilled lawyer, is based on the following:
- The Type of Employment
Generally, the more specialized the employee’s job and the more responsibility, the longer the notice period. Senior management or those with supervisory roles are usually entitled to a longer period of notice than workers on the basis there are fewer jobs available when you are closer to the top of the corporate ladder.
- The Length of Service
- The Age of the Employee:
Generally, older employees are entitled to a higher amount for severance pay. The reasoning is that these employees will find it more difficult to find another job and especially when they have worked with only a single employer for an extended period of time.
- The Availability of Similar Employment, Having Regard to the Age, Training and Qualifications of the Employee.
Wrongful Firing and Just Cause
The employer does not have to give the employee a notice period or severance pay if the employer has a good reason or “just cause” to fire that employee. For example, the employee might have been caught stealing from the company. Or, the employee was intoxicated at work while operating heavy machinery.
Most of the time, however, the reason for the dismissal is not clear and certainly not justified. The average person cannot determine whether an employer has just cause in most situations. This is because “just cause” is a legal concept and it is open to interpretation depending on the employee’s prior performance and length of service in addition to the nature of the particular infraction which led to the dismissal.
We recommend consulting with an experienced lawyer before accepting your employer’s explanation for just cause. Employers may fire you on the pretext of just cause to avoid paying you severance compensation.
Only an experienced employment law lawyer such as those at Stephens & Holman can take your wrongful dismissal case to trial and obtain the fair amount for severance pay in addition to other damages you are entitled to. These court ordered “damages” are as follows:
- Damages for Breach of Contract
Where there is a written contract of employment, an action for wrongful dismissal seeks compensation for breach of contract. You will be entitled to your full salary for the length of the employment contract despite your termination. There is, however, still a duty on the employee to “mitigate” his or her loss and attempt to find alternative employment. If you do find alternative employment and it pays less, you will be entitled to the difference.
- Damages for Appropriate Severance Pay
An action for wrongful dismissal will seek to recover what the employer should have paid for the appropriate notice period.
- Damages for Loss of Benefits
Your compensation is often much more than a simple salary. It may include things such as use of a company automobile, a yearly bonus, or stock options. At a minimum it will include vacation pay. Employees who are wrongfully dismissed are entitled to the benefits they would have received during the notice period.
- Aggravated or Punitive Damages
Wallace v. United Grain Growers Ltd., 1997 CanLii 332 (SCC), established that employers owe their employees obligations of good faith and fair dealing. This obligation stems from the power imbalance inherent in the relationship of employer and employee and the importance of employment as a component of the employee’s sense of identity, self-worth and emotional well-being. Speaking for the majority at para. 98, Iacobucci J. held that “in the course of dismissal, employers ought to be candid, reasonable, honest and forthright with their employees and should refrain from engaging in conduct that is unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive.”