Severance Package Lawyer
In Ontario courts, employees in wrongful dismissal cases are increasingly being awarded larger severance packages, some that even exceed the typical “cap” of 24-month reasonable notice period. As a result, in appropriate cases, some employees can justifiably demand compensation as part of much larger severance packages from their employers, and should always speak with an Ontario severance package lawyer.
Generally, when an employee is dismissed from their employment, an employer must provide them with either notice of termination, or financial compensation. In either case, the purpose is to allow the employee a reasonable opportunity to transition to new employment.
In terms of how to calculate severance pay in Ontario, the courts will typically award a severance package to a wrongfully terminated employee by considering a few key factors:
- did the employee sign an employment contract that minimizes how much termination pay or severance pay (severance package) the employer has to provide (that is, at least the statutory minimums under the Ontario Employment Standards Act, 2000)?
- was the employee terminated for just cause or without cause
- employee’s age, years of service, position and the availability of similar employment, relative to their knowledge, skills and experience
While there is no general “rule-of-thumb”, the courts in wrongful dismissal cases will quite often award a severance package that attempts to compensate an employee fairly and reasonably. Generally, the courts have set a limit of 24 months of compensation, unless there are exceptional circumstances justifying a longer notice period (severance package). However, in more recent cases, the courts have increasingly decided to break that 24-month barrier.
Lynch v. Avaya Canada Corporation, 2023 ONCA 696
In this case, the court justified a lower judge’s decision to award a severance package consisting of 24 months of compensation based on the following “exceptional circumstances”:
“Although the motion judge in the present case did not craft her reasons in that fashion, it is possible to discern the “exceptional circumstances” factors she relied on by comparing her listed factors with those this court in Currie held justified an award in excess of 24 months. Those factors were: (i) Mr. Lynch specialised in the design of software to control unique hardware manufactured by Avaya at its Belleville facility; (ii) it was uncontested that Mr. Lynch’s job was unique and specialized, and that his skills were tailored to and limited by his very specific workplace experience at Avaya; (iii) during his lengthy employment of 38.5 years, Mr. Lynch developed one or two patents each year for his employer; (iv) Avaya identified Mr. Lynch as a “key performer” in one of his last performance reviews; and (v) although similar and comparable employment would be available in cities such as Ottawa or Toronto, such jobs would be scarce in Belleville where Mr. Lynch – who was approaching his 64th birthday – had lived throughout his employment.”
Currie v. Nylene Canada Inc., 2022 ONCA 209
In this case, the court awarded a wrongfully dismissed employee a 26-month severance package because of the following “exceptional circumstances”:
(i) she had started working with the employer at age 18 after leaving high school to start work, where she worked her entire career before eventual being promoted to the Chief Operator reporting to the Shift Leader;
(ii) after working for the same company for 40 years, she was terminated 58 years old before the traditional retirement age;
(iii) she had very specialized skills that made it very challenging for her to find comparable new employment. Additionally, at the time of termination, she had limited computer skills and despite her best efforts to gain new basic computer skills, she would be unlikely to find a new job;
(iv) the labour landscape had dramatically evolved since she first entered the labour force in 1979 and, as her work experience was limited to working for the employer in the same manufacturing environment, her skills were not easily transferable; and
(v) based on her older age, limited education and skills set, the termination of her employment “was equivalent to a forced retirement.”
Milwid v. IBM Canada Ltd., 2023 ONSC 490
As in Currie, in the case of Milwid, the Court affirmed the general rule that absent “special circumstances,” the upper limit set in terms of wrongful dismissal damages is 24 months of reasonable notice (or pay in lieu of notice). However, in this case, the Court found the following “special circumstances” justified a 27-month notice period, as her termination amounted to a “forced retirement”
- Milwid had exclusively worked for IBM for 38 years, which represented most of his working life;
- He was terminated at the age of 62;
- the technical/skilled nature of his skills were geared towards IBM’s specialized business operations; and
- He held considerable responsibility and was entitled to a comprehensive compensation and benefits package in an uncertain economy.
Call Ontario Severance Package Lawyer
If you are an employee who believes you were wrongfully dismissed from your employment with or without a fair severance package, call today to discuss your options. As an employment law firm in Toronto, Bune Law has reviewed and negotiated improvements to many severance packages. You will review and get guidance on your severance package before you agree to sign any termination documents, and help ensure that your severance package is fair and reasonable.