Severance Pay in Canada
Severance pay can be defined basically as pay that an employee is entitled to when they involuntarily leave work. If an employer, for example, lays off employees then they will receive a severance package which may include vacation pay, salary, stock options and many others. In Canada, workers who are dismissed from employment without any probable cause by the employer will be entitled to a certain pay package which needs to be reasonable. Canada severance pay basically implies that an employer who summarily dismisses an employee for no valid reason will have to compensate them for the termination.
A reasonable severance pay package will have several elements associated with it but some of the more important once will include a salary continuation or severance pay. Employers can make this payment over a period of time. This is so with a salary continuation even though an employer may opt to pay a lump sum amount to the employee. One advantage of this pay is that most components are negotiable. It is important that the employee severance pay should meet the minimum Canada severance pay requirements as set out in the employment and labor laws across each province.
One of the components of severance pay is a bonus. If there are any bonus payments that have accrued throughout the year or over the various years that a worker served, then the employee should have this included in the final agreement. This amount is negotiable as well and an employee should ensure they receive their just and fair bonus amount included in the package. Another inclusion into a severance pay package should be a certain number of benefits.
These include pension contributions, health benefits and even contributions to certain insurance programs. These will vary though, and will depend on the company, business or employer as well as the rank of the employee and the number of years they put in at the particular place of work.
If a case of severance pay was to be brought before a court of law, a judge may be strict with enforcement of some elements of the Canada severance pay. These may include things such as training and outplacement and provision of references. While these may not be necessary in all instances, they are always welcome as they will only help to raise the profile of the individual and their future opportunities. Some clients choose to consult employment lawyers in order to receive the very best advice and negotiations regarding their severance package.
A reasonable severance pay package will have several elements associated with it but some of the more important once will include a salary continuation or severance pay. Employers can make this payment over a period of time. This is so with a salary continuation even though an employer may opt to pay a lump sum amount to the employee. One advantage of this pay is that most components are negotiable. It is important that the employee severance pay should meet the minimum Canada severance pay requirements as set out in the employment and labor laws across each province.
One of the components of severance pay is a bonus. If there are any bonus payments that have accrued throughout the year or over the various years that a worker served, then the employee should have this included in the final agreement. This amount is negotiable as well and an employee should ensure they receive their just and fair bonus amount included in the package. Another inclusion into a severance pay package should be a certain number of benefits.
These include pension contributions, health benefits and even contributions to certain insurance programs. These will vary though, and will depend on the company, business or employer as well as the rank of the employee and the number of years they put in at the particular place of work.
If a case of severance pay was to be brought before a court of law, a judge may be strict with enforcement of some elements of the Canada severance pay. These may include things such as training and outplacement and provision of references. While these may not be necessary in all instances, they are always welcome as they will only help to raise the profile of the individual and their future opportunities. Some clients choose to consult employment lawyers in order to receive the very best advice and negotiations regarding their severance package.