Nobody wants to lose their job and the financial stability it brings. But most people who are fired or let go have the right to a severance package, which provides compensation until you find a new job.
In my practice as an employment lawyer, I hear a lot of myths about severance. Often they’re spread by people who don’t understand the law or employers who may not realize their legal obligations during the termination process.
Here are the facts behind some of the most common and pervasive severance pay myths out there.
Myth: Severance is only a week’s pay per year of service
Fact: Severance is based on a number of factors and can be much more than a week’s pay per year spent working for a company. Sometimes it’s upwards of 24 months’ pay.
Severance calculations should consider many factors, including an employee’s age, type of job and length of employment. It should also consider how long it will take you to find a new job. If you work in a specialized industry, or if you have a medical condition that makes looking for work difficult, you could be entitled to more severance because it will take you longer to find new employment.
An employer may try to use an employment contract to restrict severance pay. If you have a written agreement with your employer, check to make sure it doesn’t have a termination clause that limits your severance. If it does, talk to an employment lawyer, who can review your contract and tell you if that clause is valid.
READ MORE: What you need to know before you sign a contract — even if your employer asks you to
Myth: You have to accept a severance offer by your employer’s deadline
Fact: You have up to two years from the moment you’re let go to pursue a claim for full severance.
Employers put artificial deadlines on severance packages as a pressure tactic. In my experience, they often don’t want you to consult an employment lawyer before you sign because their initial offer is far from what you’re actually owed.
But you have a right to have your termination package reviewed before you sign it. Even if your employer says you have to accept the package before leaving the termination meeting or forfeit it, the law says you can pursue your legal options first.
Once you sign and return their offer, however, it’s too late to get help from an employment lawyer and pursue your full termination entitlements.
Myth: If you’re fired for cause, you aren’t owed any severance
Fact: Most terminations are not for cause, and you are still likely owed severance pay.
Termination for cause does mean you don’t get severance. But it’s only reserved for employees who are guilty of significant misconduct, like violence in the workplace or theft. It’s also difficult to establish, because the employer needs to prove that the employee had been sufficiently and properly warned and disciplined as the issue escalated.
Employers can’t fire an employee for cause because they made a mistake at work or haven’t performed well. That’s why my firm is able to negotiate severance for our clients in most scenarios where they’re supposedly fired for cause.
READ MORE: The top 5 termination myths — and what you need to know about being fired from a job
Myth: If you weren’t employed for very long, you aren’t entitled to very much severance
Fact: Short-service employees get relatively more severance than employees with more years of seniority under their belt. One factor used to calculate severance is how long it will take you to find new employment. Just because you worked a short amount of time for a company, it doesn’t mean it will take you less time to find another job.
In 2018, my law firm, Samfiru Tumarkin LLP, secured six months’ pay for a B.C. salesman who had worked only six months for an employer, but took months to find new employment. We were ultimately able to increase his original severance offer of one week’s pay by tens of thousands of dollars — and his employer covered his legal fees.
READ MORE: The 5 facts about severance pay you need to know, according to an employment lawyer
Myth: You aren’t owed any severance if you’re forced to resign
Fact: Your employer can’t force you to resign. An employee who walks away from their job because their employer puts pressure on them or tells them to resign has been constructively dismissed. They have been terminated by the company and are owed a full severance package.
A forced resignation also includes situations where an employer tells an employee that it’s time for them to retire because they’ve reached a certain age. If your employer tells you that you should quit your job, put your objections in writing and be clear in your letter that your employer is forcing you to resign. Then contact an employment lawyer immediately to make sure you get the severance you’re legally owed.
Have you been let go from your job? Are you trying to properly calculate the amount of severance pay owed to you?
Contact the firm or call 1-855-821-5900 to secure assistance from an employment lawyer in Ontario, British Columbia or Alberta. Get the advice you need — and the compensation you deserve.
Lior Samfiru is an employment lawyer and partner at Samfiru Tumarkin LLP, one of Canada’s leading law firms specializing in employment law and disability claims. He provides free advice as the host of Canada’s only Employment Law Show on TV and radio.