How Much Severance Am I Owed?
May 9, 2022
Employment Law & Employment Standards Act
How Much Severance Am I Owed?
Have you been fired, dismissed, or terminated? Or informed by your employer that your job is about to change, or end if you do not agree to the change?
If yes, we think you might have a bunch of questions, and we are here to help. Below are a number of informational articles to help you figure out where to start; please check these out, and then let us know if you would like our help.
We recommend reading the following articles as well in order to get a better picture of your options:
How Much Severance Am I Owed
If you have been dismissed from your job, one of the first questions you are probably asking is how much severance does your prior employer owe you.
First things first, if you have properly been dismissed for cause, it is unlikely that you will be entitled to severance. If your employer says you have been dismissed for cause, please read our information on For cause dismissals – what employees need to know.
It is also important to remember that severance is not a penalty your prior employer pays for ending your employment.
Further, how much severance you may be entitled to could be limited by the language in your employment contract or agreement, if you have one. We are happy to review your employment contract/agreement at any stage of your employment to enable you to have a better understanding of your legal relationship with your employer.
In almost all other circumstances, questions about severance are reasonable to ask. In the absence of a formal document, how much severance you may be entitled to is tied to what the common law notice period would be. To understand how the notice period works a little better, please see our explanatory note below about what the notice period is.
Generally, severance is calculated to proportionately include all components of your annual compensation you would have received had you continued to be employed throughout the notice period (i.e. wages, annual bonus, commissions, phone/car allowance, health benefits, pension contribution etc.)
For these reasons, even though severance and the notice period are not technically the same thing, you are likely to hear people use the words ‘severance’ and ‘notice period’ interchangeably.
What is The Notice Period?
The notice period is the period of time between the day you are informed you are being dismissed from your job, and your final day for which your employer pays you. During the notice period, the expectation is that employees will seek and secure comparable replacement employment; this is the known as the employee’s duty to mitigate. For more information on the duty to mitigate, please see our information on Am I Obligated to find a Replacement Job?
If you have an employment contract or agreement, your notice period may also be affected by any number of provisions in your employment contract/agreement, and specifically the language in the termination clause section. We are happy to review your employment contract/agreement at any stage of your employment to enable you to have a better understanding of your legal relationship with your employer.
In the absence of a written employment contract/agreement, and pursuant to the common law, the appropriate amount of time your employer should be providing you to find comparable replacement employment is calculated based on a number of your personal employment factors, known as Bardal factors. Bardal factors, and those factors which may increase or decrease the notice period, typically include:
• your age;
• the length of time you served with that particular employer;
• job position and/or level of seniority;
• availability of comparable replacement employment - this includes how specialized your job is, or the combination of skills and education someone would need to do your job; and
• select other factors which may not apply to all persons (such as your geographic location or pregnancy).
Your employer can ask for you to continue to report for work during your notice period, although the more common practice in today’s world is for the employer to pay the employee as if the employee had worked through the notice period, and for the employee to cease reporting to work the same day, or within a few days.
It is important to remember that when you as the employee receive notification that you are being terminated, whether you work through the notice period or receive pay in lieu, if the notice period is the appropriate length, and you received the correct amount of compensation accordingly, your employer is unlikely to have any further obligation to you.
Employment Lawyers Advising Workers
We're on Your Side - Our skilled team of employment & labour lawyers have an outstanding reputation throughout the Lower Mainland and the Fraser Valley, and are dedicated to helping you resolve employment issues in the most efficient manner possible. If you have any questions or need assistance please reach out to our team today by submitting a Contact form.
FAYME K. HODAL
Fayme K Hodal and her team assist clients with all Employment law matters, including wrongful and constructive dismissals, dismissals for cause, executive compensation and buy-outs, and negotiation of severance packages.
Fayme has extensive experience working with individual, business and corporate clients throughout British Columbia and Alberta. She regularly advises on civil disputes of all varieties and prepares coverage opinions relating to private insurance disputes.
Fayme also assists clients with privacy law and defamation questions.
Fayme is a life-long West Coast local; she obtained her...
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