An unfortunate reality of today’s corporate world is restructuring, outsourcing and downsizing. For many hard-working employees, the result is lay-offs. One day you go to the job you’ve devoted yourself to for years and the next you find yourself unemployed with a standardized letter letting you go, along with a request to sign a ‘Release’ in exchange for a severance package. You are reeling and have no idea if the package they are offering you is what you are entitled to. This is where an employment lawyer comes in. Many lawyers, including myself, are happy to meet with people in your shoes to review your situation and give some basic advice as to whether or not the severance package offered is within the acceptable range.
Most employers are at least familiar with the NS Labour Standards Code which outlines the minimum payout an employee is entitled to if the employer terminates them ‘without cause’ (i.e. You’re not ‘Fired’ for doing a poor job, you’re just not needed any longer). These amounts are as set out in the table below. There are, of course, exceptions which your lawyer can review to see if they apply to you. The government has also put out a user-friendly Guide to the Labour Standards Code which is a good starting place to answer some of your questions.
However, many employers are not aware that unless your contract explicitly states that upon termination your payout will only be equivalent to the amounts provided for by the Code, these amounts are just the starting point for determining what a ‘reasonable’ amount should be. The purpose behind the required severance is to hopefully give a person enough time to find a similar job so that they aren’t stuck for a period without any income. Clearly, in a lot of situations, the Code amounts would not be sufficient to achieve that goal. As a result, the courts have come up with a sliding scale that ranges from the minimum provided in the Code to an upper limit of approximately two years. The appropriate amount in any given case depends on the facts of that person’s situation.
Several factors that affect how long it will likely take the employee to find another job are typically considered. Some of these include: Age - The older you are, often the less employable you are; Specialization - The more specialized your field, the fewer opportunities you may have; Geographic region - Often fewer jobs are available in a small rural town than in an urban core; Employment rates – more competition means less chance of getting the job. How your situation ranks on these types of indicators will suggest what a fair amount of severance may be. The less likely you are to find a job quickly, the larger your severance should be.
Remember, though the employer would like you to believe severance offers are ‘take it or leave it’, they often aren’t. You owe it to yourself to know what you are entitled to before you sign on the dotted line.
If you have questions regarding employment disputes in general you can call us at 902-826-3070 or contact us online. We offer a no commitment Issue Review Consult for $100+HST where you have the opportunity to explain your situation to a lawyer and get basic advice before deciding whether or not you'd like to retain us.
By: Dianna M. Rievaj, MBA, LLB - Managing Lawyer
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