Inadequate Severance
The dismissal or discharge from employment, also known as severance, is an ongoing issue in workplace policies and governance. The article “Severance Pay” by the Ministry of Labour, Training and Skills Development explains in detail the aspects of severance pay; when it occurs, qualifications to obtain it, amount paid, recall rights, etc. Through my analysis of this issue, I will examine the problems of the current severance systems and how it is affecting workplaces and employees.
To begin, the Canadian law on severance pay is that the employer must have a payroll of at least $2.5 million and the employee must have been employed for at least 5 years. The employee, if those conditions are met, will be entitled to severance of up to 26 weeks regular wages. An issue that quickly came up was the payroll: was it to be decided upon uniquely Ontario, or Canada as a whole? It was then quickly settled that, with the employees protection in mind, the Ontario payroll would be the decided payroll.
Severance, for an employee, is very important because it can help lead one from one job to another. It will presumably affect the employee’s ability to find another job and transfer his skills adequately. There are many factors that affect severance pay, some which remain unclear to me as to why they would have influence on that. For example, an aging employee will be rewarded for his service with an extended notice period, as well as an employee who will have worked long term.
Along with factors that influence severance pay, there are conditions which can affect the amount of severance pay one receives. For example, group benefits and bonus payments must be included, as well as all salary payment that would otherwise have been paid to the former employee. It is also important to think about pension plan contributions for people who have retired or are retiring.
I tried to find a graph to back up my information, but could not find one that represented well the struggles people of all ages go through with severance pay. As stated in both articles, many factors need to be taken into consideration in order to calculate the adequate severance pay an employee will receive. Overall, there are many problems in the workplace in Ontario and Canada, severance pay being one of them. Severance pay goes hand in hand with its qualifications and recall rights, and it is long overdue for the Government to step in and reform rules, laws and regulations to avoid inequality within employees who have been terminated.
References:
Severance pay key issue in terminations. (2012, August 13). Retrieved from https://nelliganlaw.ca/article/employment-law/severance-pay-key-issue-in-terminations/
Severance Pay. (2019, October 28). Retrieved from https://www.ontario.ca/document/your-guide-employment-standards-act-0?_ga=2.43783205.1837350101.1518534577-499445008.1512744963
Andreanne Robert 
Hi Andreanne,
In a time of overwhelming job losses – economists predict a global recession due to the COVID-19 pandemic (McLeod 2020) – I am also particularly interested in the requirements and conditions for employees to receive severance pay. Aside from the debate surrounding its jurisdiction, I personally believe that the 2.5-million-dollar payroll criterion proves detrimental to the financial welfare of many unemployed Ontarians, especially those who previously worked for start-up companies or small businesses.
Since these workplaces lack a sufficient payroll, yet characterize the most vulnerable institutions during a recession, many Ontarians will not be eligible for severance packages, while their alternative job prospects will prove abysmal (McLeod 2020). On the other hand, this economic downturn will threaten the survival of these businesses altogether, dubbing severance pays, and even paid sick days, financially unfeasible for owners (McLeod 2020). Predicting their termination and accompanying lack of severance, do you feel that older employees will elect to retire, as opposed to job hunt, during the COVID-19 outbreak?
Notwithstanding the validity of your analysis, I must note my unease at your singularized use of male pronouns throughout your response. Though I recognize that this was not your intention, I feel that referencing employees as “he” implies that men still represent the primary breadwinners in modern households and, by extension, the sole demographic impacted by layoffs. But, overall, great work!
References
McLeod, James. 2020. “Startups Shift Focus to Survival as COVID-19 Uncertainty Looms.” Financial Post. Postmedia Network Inc. March 13. https://business.financialpost.com/technology/startups-shift-focus-to-survival-as-covid-19-uncertainty-looms.
Thanks,
Sam Lee
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Hello Adreanne!
I really enjoyed reading your post it is very interesting especially with the Covid-19 virus spreading the way it is. I did my blog on that topic. I appreciated how you started your blog with the definition of severance, and how you clearly stated what you were going to focus on in your post. One thing that could have made your blog slightly easier to comprehend would be explaining the rules of severance in Ontario. For example, “An employee would be entitled to a week of wages for every year they have worked for the company with a maximum of 26 weeks.” While reading this article I was wondering about what the government does with part-time workers concerning severance pay. I did little research on it, but it looks like it is not very likely. Do you think that is fair? Once again, great job with your post!
“What Is Severance Pay?” What Is Severance Pay? | Steps to Justice | Your Guide to Law in Ontario, 1 Mar. 2018, stepstojustice.ca/questions/employment-and-work/what-severance-pay.
Best,
Rachael
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Hi Andreanne,
Thanks for sharing! As someone whose job was affected by Covid – 19, being fired or laid-off was something that I was very worried about. I am still employed and am receiving catastrophe pay from the company, but it made me think about if I were to get fired how would it affect me. I work at Starbucks part time; my understanding is that these laws on severance only affect people who are working full time jobs. How would this affect people who work part time jobs who are losing their jobs right now because of this pandemic? Are there specific laws on severance that can protect part time employees if they were fired or laid-off? If there are no laws or regulation on this, what do you think they should be? These people who are fired from there part-time job should also be receiving severance, but it should be less time as they work less hours in the week compared to a full-time job. This post really made me think about what would happen to me if I where to ever lose my job. Had a pleasure reading your article.
Thanks
James MacAloney
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Hi Andreanne,
Thanks for sharing! As someone whose job was affected by Covid – 19, being fired or laid-off was something that I was very worried about. I am still employed and am receiving catastrophe pay from the company, but it made me think about if I were to get fired how would it affect me. I work at Starbucks part time; my understanding is that these laws on severance only affect people who are working full time jobs. How would this affect people who work part time jobs who are losing their jobs right now because of this pandemic? Are there specific laws on severance that can protect part time employees if they were fired or laid-off? If there are no laws or regulation on this, what do you think they should be? These people who are fired from there part-time job should also be receiving severance, but it should be less time as they work less hours in the week compared to a full-time job. This post really made me think about what would happen to me if I where to ever lose my job. Had a pleasure reading your article.
Thanks
James MacAloney
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Hi Andreanne,
Thanks for sharing! As someone whose job was affected by Covid – 19, being fired or laid-off was something that I was very worried about. I am still employed and am receiving catastrophe pay from the company, but it made me think about if I were to get fired how would it affect me. I work at Starbucks part time; my understanding is that these laws on severance only affect people who are working full time jobs. How would this affect people who work part time jobs who are losing their jobs right now because of this pandemic? Are there specific laws on severance that can protect part time employees if they were fired or laid-off? If there are no laws or regulation on this, what do you think they should be? These people who are fired from there part-time job should also be receiving severance, but it should be less time as they work less hours in the week compared to a full-time job. This post really made me think about what would happen to me if I where to ever lose my job. Had a pleasure reading your article.
Thanks
James MacAloney
LikeLike
Hi Andreanne,
Thanks for sharing! As someone whose job was affected by Covid – 19, being fired or laid-off was something that I was very worried about. I am still employed and am receiving catastrophe pay from the company, but it made me think about if I were to get fired how would it affect me. I work at Starbucks part time; my understanding is that these laws on severance only affect people who are working full time jobs. How would this affect people who work part time jobs who are losing their jobs right now because of this pandemic? Are there specific laws on severance that can protect part time employees if they were fired or laid-off? If there are no laws or regulation on this, what do you think they should be? These people who are fired from there part-time job should also be receiving severance, but it should be less time as they work less hours in the week compared to a full-time job. This post really made me think about what would happen to me if I where to ever lose my job. Had a pleasure reading your article.
Thanks
James MacAloney
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