Articles : All You Need to Know About Severance Packages

What are severance packages?
They are pay and benefits employees are entitled to receive when they leave from a company unwilfully, for example: when a company is downsizing, when your position is getting eliminated, or when the company is looking to cut costs.

What’s included?
The package will outline the purpose of the severance plan, conditions for paying severance, how the severance pay has been calculated, how the pay will be administered (whether it’s a lump sum, biweekly, monthly, etc.).

It’s not required.
Severance packages are not required unless it has been stipulated in your employment contract. The only requirement a company must provide to you is a “Notice of Employment Standards,” which is set out by the Ontario Ministry of Labour. Depending on how long you have been with the company, determines how much compensation you could get.

Speak with a lawyer.
Depending on your situation, you may want to speak with a lawyer before you sign the severance package agreement. Some situations include:

• If you’ve been with the company for 30 years
• Someone who is near retirement
• Will have trouble finding another job with a similar salary

To learn more about severance pay in Ontario you can click here and here.

Watch Marc Belaiche, CPA, CA, President of TorontoJobs.ca discuss this topic here.

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