severance automatic for Federally Regulated Employees
Federally regulated employees have many workplace rights similar to those of non-unionized workers in Canada, including the right to receive a full severance package when they are laid off or wrongly fired. Severance pay amounts vary, but in some cases, they can add up to 24 months of pay.
As a result, it is important for Federally Regulated Employee severance pay to understand their severance pay rights in case they are laid off or wrongly dismissed by an employer. Fortunately, our experienced team of employment lawyers is here to help.
The Canada Labour Code (CLC) establishes basic rights and responsibilities for employers and employees, including wages, health and safety rules, severance pay, and vacation days. These provisions are generally the same for private and government employers, but there are a few important differences.
Is severance automatic for Federally Regulated Employees?
For example, employees who are not part of a union can be terminated without cause (known as summary dismissal) by most employers in Canada, but only if the employee has been employed for a minimum of one year and the employer has provided them with notice or payment in lieu equal to their salary that would have been paid during the notice period. Federally regulated companies are also required to provide their employees with a written statement of benefits upon termination that includes the employee’s vacation entitlement, severance pay, and other compensation they are entitled to receive.
In addition to severance pay, Federally Regulated Employees who are laid off or wrongly fired may be entitled to common law compensation, which is the remainder of their telecommunication employee severance pay balance after all deductions. This is calculated by considering a variety of factors, such as an employee’s age, position or job title, level of compensation and length of service. If a Federally Regulated Employee is laid off or wrongly dismissed and they are eligible for common law severance pay, it is important that they seek legal advice as soon as possible so that their severance package is accurate and adequate.
If a Federally Regulated Employee accepts a new civilian position with the Government, or a position with an instrumentality of the Department of Defense or Coast Guard, which is more than an equivalent to their current position, the severance pay allowance must be recomputed. The amount is the difference between the employee’s current severance pay allowance and the amount that would be payable for the same number of weeks in a regular position with the Government.
Employers must also pay their Federally Regulated Employees any outstanding tax obligations incurred as a result of their severance pay. This could include severance pay, holiday pay and/or other bonuses, as well as any unreimbursed business expenses. It is best to contact a tax consultant before receiving any severance packages as the size and nature of the package could significantly affect your tax situation. Moreover, if the amount of your severance package is significant, you may wish to consider transferring it into a Registered Retirement Savings Plan (RRSP) or other tax-deferred savings account to minimize the impact on your future income.
