Depending on your circumstances, if you are fired from your job, you may be entitled to receive severance pay. This compensation is intended to help you bridge the gap between your old salary and your new income, and may also include other types of compensation such as bonus payments, car allowances or commissions. However, it is important to note that severance pay ontario differs from termination pay. The two terms are often used interchangeably, but they are different in that severance pay is not required under the Employment Standards Act, while termination pay is.
Termination pay is a specific type of compensation an employer is required to provide to employees when they are dismissed from their job, according to the Ontario Employment Standards Act (ESA). The ESA stipulates that an employee will be entitled to one week of wages for each full year of service, up to a maximum of 26 weeks. The ESA only applies to employers with a payroll of $2.5 million or more in Ontario, and it only applies to employees who have worked for more than five years with their company.
In addition to statutory severance pay Ontario, employers are also required to provide notice to terminated employees. This is known as common law notice and is based on the duration of your employment relationship. Common law notice is generally much higher than the minimum severance pay under the ESA, but it varies by province and even within a city.
How Severance Pay Ontario Differs From Termination Pay?
Many of these differences are a result of how the ESA and common law are enforced. For example, some employers have been found to discriminate against employees when letting them go. In these cases, the company is liable to pay compensation for human rights damages in addition to the severance package.
The difference between severance pay ontario and termination pay can be confusing for employees, but it is crucial to understand the distinction. Severance pay is a separate and additional payment to the termination pay that an employer owes an employee, and it must be provided on top of the minimum amount stipulated in the ESA.
In most cases, severance pay will be paid in a lump sum. However, some employers may choose to make it in installments. This can be helpful for a number of reasons, including tax deductions and the ability to spread the cost over a longer period of time.
Regardless of the form of severance pay, it must be paid out no later than three months after the date of your job loss. If you are unsure how much you are owed, an experienced employment lawyer can help.
It is also important to remember that severance pay is not the same as a severance agreement. The latter is a contract between the employer and employee that may include other terms in addition to severance pay. This can be an excellent tool for protecting an employee’s interests in the event of a dismissal and can prevent employers from trying to deny or limit severance pay.
