Imagine working for the same company for 28 years, only to be told that the business is shutting down and your job will eventually disappear.
You are given a year’s notice. As the months go by, work gets slower. You start wondering whether there is any point in staying.
Why not quit, find another job and move on?
I recently spoke with an employee in exactly this situation. He came to us for a consultation because he was considering leaving before the company shut down.
It’s a good thing he asked before handing in his resignation.
Quitting early could have cost him a significant amount of severance.
What happens if you quit before your termination date?
When an employer tells you that your employment will end on a future date, the time between receiving that notice and your final day of work can count toward your overall severance package.
But that doesn’t necessarily mean your employer has satisfied everything it owes you.
A long-service employee can be entitled to substantial compensation when their employment ends. Severance can be as much as 24 months’ pay, depending on factors such as age, length of service, position and the availability of similar employment.
In this employee’s case, he had worked for the company for 28 years and had been given approximately 12 months of working notice.
Based on his circumstances, that working notice may not represent everything he is owed.
Had he simply resigned before his termination date, however, the situation could have changed dramatically.
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READ MORE: What happens to an employee when a business closes or they’re given working notice?
Leaving early can be treated as a resignation
If you voluntarily resign before the termination date your employer has given you, you could give up severance you otherwise would have received.
Your employer may take the position that it did not terminate your employment because you chose to leave first.
For a long-service employee, that can be an extremely expensive mistake.
That is why we advised this employee not to simply hand in his resignation. We are helping him understand his full severance rights and how to protect them before deciding what to do next.
The important point is that employees should never assume they can leave during a working-notice period and still collect the severance they would have received had they stayed.
READ MORE: Offered a voluntary exit package? Why taking it could mean leaving money behind
What if you find another job during your working notice?
This is where employees need to be particularly careful.
If you have been told that your job is ending months from now and another employer offers you a good opportunity, it can be tempting to accept immediately.
Before resigning, find out what leaving could mean for your severance.
There may be significant money at stake. A quick decision to quit could potentially eliminate some or all of the compensation you would otherwise receive.
That doesn’t necessarily mean you have to turn down a great new job. It means you should understand your options before resigning from your current one.
READ MORE: He was fired for job hunting — could his boss withhold severance?
Get advice before you quit
If your employer gives you advance notice that your job is going to end, don’t assume the severance issue has already been settled.
Before making a decision, find out:
- How much severance you could be owed
- Whether the working notice satisfies your full entitlement
- What happens to your severance if you leave early
- Whether you should sign any documents your employer gives you
For someone who has spent decades with the same employer, the difference can amount to many months of compensation.
The employee I spoke with did the right thing: he called me before he quit.
We’re now helping him navigate the situation and protect what he could be entitled to.
You can use the severance pay calculator to get an initial sense of what may be owed, but have your working notice and severance options reviewed before resigning or signing any documents.
If you know your job is ending and you’re thinking about leaving early, get legal advice from Samfiru Tumarkin LLP before handing in your resignation. A short conversation before you quit could prevent you from walking away from a substantial amount of severance.
Contact Samfiru Tumarkin LLP or call 1-855-821-5900 for a consultation with an employment lawyer. Get the advice you need and the compensation you deserve.
Lior Samfiru is an employment lawyer and co-founding partner at Samfiru Tumarkin LLP, Canada’s most positively reviewed law firm specializing in employment law and long-term disability claims. He provides legal insight on Canada’s only Employment Law Show on TV and radio.
