Employment Law Q and A
I fired an employee and paid the Labour Standards severance pay of 4 weeks. Now the employee is suing me for more? Is that right?
The employee is entitled to sue for more since the severance pay under the Employment Standards Act (“ESA”) is just the minimum severance pay required. The notice in the ESA varies between two weeks and eight weeks depending on years of service. Typically older, long service and managerial or professional, employees are entitled to more notice under “Common Law”.
It sounds mysterious but it isn’t. Lawyers practising in this area are able to provide quick estimates of exposure to common law severance obligations. Once the factors involved in the determination are explained, employers are usually able to estimate their exposure for severance pay.
There are many other entitlements on the part of terminated employees that need to be considered which are not dealt with in the Employment Standards Act, including entitlement to group benefits, pension issues, bonuses, discrimination issues, and post termination competition. It is usually best to get some advice – particularly where the employee to be terminated is a long term employee or is suffering from a disability.
Finally, if a termination is based on just cause there is no obligation to pay severance pay.