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Table of Contents What is termination pay? Termination pay is money awarded to an employee by their employer for loss of employment. The amount of termination pay awarded is the amount of income which the employee would have earned from his employer during the period of required “reasonable notice”. What is reasonable notice? At common law, an employee is entitled to, in the absence of express agreement in a termination clause in an employment contract,…
Sometimes, an employer decides to force an executive to sign a new contract while they are still working (usually in case of promotion, or because the executive doesn’t have a contract already, or the employer wants to update the termination clause in an existing contract, or because the employer simply thinks the executive earns too much compensation). However, employees and employers alike should consider that the demand to sign a new contract could trigger a…
Almost everyone in Ontario is entitled to ‘severance pay’ unless that person is terminated for just cause. However, keep in mind that there are two kinds of severance pay: Common law severance pay; and Statutory severance pay. Almost everyone has a right to common law severance pay and everyone who worked for 5 years at an employer with a $2.5 million dollar payroll is entitled to statutory severance pay.  What is the difference between common…
There is no rule that 24 months’ is the absolute maximum amount of reasonable notice a long-standing, senior employee can receive in Ontario (see my earlier blog post on the topic here). To that effect, in Lowndes, the Ontario Court of Appeal observed that calculating reasonable notice is “case-specific” and, while there is “no absolute upper limit or ‘cap’ on what constitutes reasonable notice, “exceptional circumstances” may support a notice period in excess of…
Question: How much severance am I owed in Ontario? Lawyer Answer: The first thing we do when calculating how much severance an employee in Ontario is entitled to is to check their employment contract for a termination clause. If the employee has a termination clause in their contract, then we determine what it promises in case of termination. We also check to see if the termination clause is enforceable. If the termination clause says the…
Some employment contracts have a clause that says the employee must be ‘actively employed” on the bonus payout date to get his bonus. Sometimes, an employee with this clause in their contract is terminated before the annual bonus payout date and the employer refuses to pay the employee his annual bonus because he wasn’t “actively employed’ on the payout date. Thus, the question becomes, is the employee entitled to the bonus or not? When an…
Writing for the Ontario Court of Appeal in Kieran (2004),[1] Justice Lang stated [at para. 34] that, where an employee has resigned, he may resile from the resignation if the employer has not detrimentally relied upon it: [34] Even if the trial judge had been correct in finding a resignation at law, it is clear, as counsel agreed, that an employee may resile from a resignation, provided the employer has not relied upon it…
The Ontario Human Rights Code (the “Code”) prohibits discrimination in employment. However, the Code does not prohibit general bullying and harassment in employment. A successful claim of bullying and harassment at the Human Rights Tribunal of Ontario (“HRTO”) requires an applicant show that one of the prohibited grounds of the Code was a factor in the bullying and harassment (i.e. race, age, sex, disability, etc.). Thus, whenever faced with a bullying and harassment Application at the…
Employment Contracts: Key Clauses Employers in Ontario should require employees to sign an employment contract before starting work. These agreements usually define the employee’s earnings, the employer’s policies, restrictive covenants such as non-competition or non-solicitation clauses and, most importantly, what happens in the event of termination. If employees do not sign an employment contract, they still have an implied agreement with their employer in that they are bound to the “common law” rather than defined…
In Ontario, a lay-off can be no longer than 13 weeks. Under section 56(2) of the Employment Standards Act, if the lay-off is longer than 13 weeks, then the employee becomes terminated. In that case, the employee is likely entitled to pay in lieu of notice and severance. However, in rare circumstances, a lay-off can be longer than 13 weeks. In that regard, a lay-off can be up to 35 weeks if one of…