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Top 10 Myths about Severance

Top 10 Myths about Severance

Posted by Darryl Aarbo — filed in Employment Law

If you’ve been fired from your job, you are usually entitled to some payout, called severance.  There are pervasive urban myths about how much an employer has to pay an employee on termination.  Some have basis in truth and some are just plain wrong. 

The Myths about Severance

  1. An employee is entitled to 1 month/1 week/2 weeks per year of service
  2. An employee is only entitled to what is stated in the Employment Standards Code
  3. A written contract is the final say on severance
  4. A company policy is the final say on severance
  5. The employer can pay less because of the poor economy
  6. The employer can pay less because the employee did not make targets or is not performing well
  7. Not having a contract prevents or limits a severance payout
  8. Age does not matter when calculating severance
  9. Years worked does not matter when calculating severance
  10. The job market does not matter when calculating severance

The Reality

There is no formula to severance; anybody or anything that states that is just plain wrong.  Determining common law severance requires balance a number of factors and length of employment is only one factor and not always the biggest factor. 

One of the big factors is age, older people are going to get more; Okay Boomer‽  Younger people can make fun of it, but it’s a fact.  A baby boomer is going to get more than a millennial because the law considers it harder for a boomer to get a job after 25 years with an employer than a millennial after 5 years.   Is it true?  Not sure; no questions millennials face a tough job market.   Sometimes the law is not actually fair. 

If you have a written contract or there is a policy in place then that MAY determine the length of severance, but not necessarily.    To bind two parties a contract and policy has to meet a number of rules.  Do not assume that just because a contract is written and signed by both parties that it is binding.  A contract sign by both party after the employee had already commenced employment could be unenforceable because there is no consideration (please see our other blog posts on this issue).  Same with a policy found in a binder on a shelf in someone’s office that only gets pulled out after someone is fired, it may not be enforceable. 

If you have been terminated and want the severance you’re entitled to, contact a lawyer at Aarbo Fuldauer LLP in Calgary.

Address: 3rd Floor, 1131 Kensington Road NW, Calgary, AB, T2N 3P4

Phone: (403) 571-5120

Email: info@aflawyers.ca

The information in the blog is not legal advice. Do not treat or rely upon it as legal advice.  If you require legal assistance, please contact a lawyer.

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