Layoffs are never easy for those that have been let go. Under employment standards legislation across the provinces, most employees have the right to compensation, depending on the length of service.
If you’ve been let go but you think the compensation that you were provided with too little compensation, what steps can you take to ensure you got everything that you are entitled to?
You need to know what the law is and what your contract says about layoffs.
What is compensation?
Compensation means the termination payments you are entitled to and that the employer owes you after you have been let go.
They can include:
- Notice period;
- Wages in lieu of notice;
- Severance (if applicable);
- Overtime and vacation time (if applicable);
- Sick pay; and retiring allowance (if applicable).
Note that not every employee has the right to all these payments. Most employees are eligible for notice period and wages in lieu of notice entitlements though.
The applicable law
Every province and territory has an employment standards act. The employment standards act sets out minimum obligations employers have towards their employees when it comes to wages, vacation time, vacation pay and layoffs.
Under the legislation it will usually be specified how much compensation an employee is due under the legislation. These are usually the minimum entitlements with which an employer has to comply.
For example, in British Columbia, the notice or wages in lieu of notice according to the employment standards act are:
- An employee who’s worked between three months to one year is entitled to one weeks’ notice;
- An employee who’s worked between three months to one year is entitled to two weeks’ notice.
- An employee who’s worked between three to four years is entitled to three weeks’ notice.
- An employee who’s worked between four to five years is entitled to four weeks’ notice.
- An employee who’s worked between five to six years is entitled to five weeks’ notice.
- An employee who’s worked between six to seven years is entitled to six weeks’ notice.
- An employee who’s worked between seven to eight years is entitled to seven weeks’ notice.
- An employee who’s worked over eight years is entitled to eight weeks’ notice.
Your employment contract
Often the employment agreement will have something to say about compensation entitlements that an employee has upon being let go, even if it’s just to say that the employer has to abide by minimum requirements under the employment standards act of the applicable province or territory.
Sometimes employment contracts give the employee additional compensation pay entitlements, which is why the contract must be carefully reviewed.
Are there employees that are not entitled to compensation?
If a person is a freelancer or an independent contractor they are likely not entitled to receive compensation, unless their contract specifies otherwise. Also, new employees that are let go within the first three months of employment usually aren’t entitled to compensation.
Finally, employees who have been fired “for cause”, which in other words means some type of misconduct, usually are not entitled to compensation upon termination.
If you think you haven’t been given proper layoff compensation by your employer consult an employment lawyer.
Termination, layoff or dismissal
Severance Pay Ontario