Severance Pay Ultimate Guide
What is Severance Pay?
Most companies provide a severance agreement that spells out the financial conditions of the employee's departure. In Ontario, a severance package is mandatory. The common everyday usage of the word severance is very different than what it meant in employment law context. How much "severance pay" you are entitled to legally depends on whether you intend to sue under common law or if you intend to file an ESA claim after you have been terminated.
How Much Severance Pay Do I Get?
Common Law vs. Employment Standards Act (ESA)
Common Law Severance, also referred to as reasonable notice, share nothing in common to ESA Severance and they mean very different things.
The Employment Standards Act breaks down the amount an employee might receive after termination into ESA termination pay (the amount you get depends on how long you have been working for the company) and ESA severance pay (an amount to award long term service employees if certain conditions are met).
The Common Law, on the other hand, does not draw a distinction between termination pay and severance pay, and instead award a monetary amount depends on a number of factors.
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