Severance – What Happens When Your Company Has Let You Go
Who this article is for?
This article is for non-unionized employees who are not governed by a collective bargaining agreement. If you are a unionized employee, there will be different processes and rules that apply to you.
Can my company terminate me?
This is not actually a dumb question because often a termination letter will contain an explanation that confuses the employee. For example, one termination letter may cite “poor performance” as the reason for the employee’s dismissal; however, the employee will tell me that he has received a bonus for consistently meeting the company’s targets. Another termination letter may cite “corporate restructuring”; however, the employee will tell me that she has always made it clear to the company that she will adept to whatever changes the company requires. Sometimes a termination letter will not include any reason for the termination. In all three of these cases, the employee is left confused.
Termination With Just Cause
A company can fire an employee without any prior notice or severance if there is just cause. However, there is no absolute rule on when an employee’s conduct supports termination with cause. Also, whether an employer should have issued a warning before termination requires analysing the situation’s context. It is always advisable to seek legal advice if your employer has fired you with cause.
Termination Without Just Cause
If the employer cannot prove there was just cause to terminate the employee, then the employer has to give the employee termination notice. Often the company will provide the employee with pay in lieu of working notice rather than keeping someone around who is no longer vested in their work.
Is the Severance Package Fair?
It is important to get legal advice if a company has offered you a severance package. There is legislation that outlines minimum notice periods (and permits employers to pay out the employee instead of providing working notice). For provincially regulated employees in Alberta, the maximum notice period is 8 weeks for employees with more than 10 years of service with the company. However, you might be entitled to additional notice under the common law. If so, calculating your severance entitlement would look at multiple factors, including your age, how long you worked with the company, what your job was, and your compensation. Furthermore, there may be additional issues of human rights violations that make your termination unlawful.
If you have been let go, either with or without cause, please contact us. We offer a flat-fee service to review your termination letter or severance package, so that you have practical advice on what to do next.