Severance Pay Lawyers in Calgary, AB

Severance pay is compensation an employee receives when the employer terminates his or her employment. The law requires employers to give “reasonable notice” to employees before terminating their employment. This notice is based in part upon the employees’ years of service, so it can be up to eight weeks for employees who have worked for the employer for many years.

Rather than have the employee continue to work during this lengthy – and often awkward – notice period, many employers will simply compensate the employee for everything he or she would have earned during the notice period. The Alberta Employment Standards Code and the British Columbia Employment Standards Act both set minimum levels of severance pay. This is based upon years of service and other factors. Many employees, however, are entitled to more severance pay than the minimum standards set forth in these laws. This is why it is so important to meet with a lawyer about your particular situation.

Severance pay is often referred to as a “severance package.” This is because a worker is entitled to be compensated for more than just lost wages. Severance can also compensate for commissions, bonuses, pension contributions, RRSP contributions, medical and dental benefits, vacation pay, and stipends for mobile devices, gym memberships, and other fringe benefits.

Severance pay is not mandatory in all situations. If an employee is fired for just cause, the employer has no obligation to offer severance pay. “Just cause” is defined as conduct on the part of the employee incompatible with his or her duties, conduct which goes to the root of the contract with the result that the employment relationship is too fractured to expect the employer to provide a second chance.

Employers are also not required to give notice of termination or pay in lieu of notice to seasonal workers, those employed for ninety days or less, or those employed on-site in the construction industry. There are some other exceptions, so again, be sure to consult with a lawyer about your specific circumstances.

Most workers in Alberta will qualify for severance if they:

• are not dismissed for just cause which can be very difficult for an employer to establish; or,
• If they resign or quit their position-though they may still be entitled to severance pay if they felt that they had no choice but to resign given the employer’s conduct or lack thereof. Again, these are important questions that you should take the time to run by an employment lawyer.

In these circumstances, and with limited exceptions, employees are entitled to either be given reasonable notice of termination or pay in lieu of notice.

There are many factors that can impact the amount of your severance package. Some of the most common include:

• Cause of termination
• Length of time you were employed
• Employment insurance coverage
• Your age
• The nature of the work
• How long you were unemployed
• The manner in which you were dismissed

Your severance pay will also depend upon the benefits you received from your employer. Bonuses, commissions, incentive programs, profit sharing, and other types of benefits are all compensable to an employee who is fired without just cause.

Employees are generally required to pay income tax on any severance package. The amount of taxes you pay will depend on the amount of severance package, and whether you choose to receive it as a lump sum or over time as a deferred salary. It is possible to defer taxes on a severance package by placing it in an eligible retirement or pension fund. Legal fees you spend to obtain your severance package can also be deductible from your taxes.

Taxes vary with each severance package, so it is important to get advice from a tax lawyer or accountant about your particular severance package. Taxes vary from 5 to 30 percent, depending on the amount of the package and the province in which you reside. Be prepared for these taxes to be deducted from a lump sum severance package (as your employer has a legal obligation to withhold and pay taxes). If you are receiving a deferred severance package over time, the taxes can be spread out. Consult with an accountant or lawyer about your specific tax obligations.

Find out how much severance pay you are entitled to in Calgary

The skilled employment lawyers at Taylor Janis Workplace Law fight hard to protect the legal right of Alberta employees. If your employment has been terminated, you should meet with a lawyer to determine whether the termination was lawful, and how much severance pay you are owed.

At Taylor Janis LLP, we have the skills, knowledge, and expertise to handle all of your employment & severance needs.