my rights for Federally Regulated Employee severance pay
The termination of a salaried employee can result in substantial financial compensation including a base salary, bonus, vacation and holiday pay, health benefits coverage, car allowance, pension pension and other employment-related expenses. These payments are all taxed in a similar fashion to wages and may be taxable in full or in part depending on how they are paid and the recipient’s income tax bracket. As a result, it is important to understand the taxable impact of severance pay before accepting a package from an employer.
When employees are dismissed by a federally regulated company, such as RBC, Rogers, Telus or Bell, they usually receive a severance package consisting of working notice or pay in lieu of notice. The amount of the severance package depends on a number of factors including age, years of service and position within the organization.
As a general rule, most non-unionized employees will receive two weeks of pay or working notice in the event of a termination without cause. These minimum requirements are outlined in the Canada Labour Code (“CLC”). However, on February 1, 2024, employers will have to provide employees with enhanced termination entitlements based on a graduated scale of consecutive years of service, similar to provincial termination provisions. Additionally, employers will need to provide employees with a statement of benefits upon termination outlining their wages, vacation, pay, Federally Regulated Employee severance pay and other benefit and pay received during the course of their employment.
What are my rights for Federally Regulated Employee severance pay?
While severance packages are typically structured as a lump sum, some companies may choose to deliver their severance payments over time. This is often done for financial reasons to help mitigate the expense of the severance payout and/or to avoid putting employees into a higher tax bracket. In addition, some companies may choose to break down their severance pay payments into regular periodic payments to ease the administrative burden of calculating the taxes on these amounts.
A telecommunications employee is considered to be a Federally Regulated Employee and as such is entitled to the same severance pay as all other federally regulated workers in Canada. However, in some cases, telecommunication employers misclassify their workers as independent contractors rather than employees to avoid having to pay them minimum wage, vacation and overtime pay, or to provide them with telecommunication employee severance pay when they are fired.
If you have been offered a severance package by your employer, be sure to consult with an experienced employment lawyer at Samfiru Tumarkin LLP before signing anything. A lawyer can review the terms of your contract and advise you on the appropriate level of severance pay. If you believe your employer has misclassified you as an independent contractor, our Pocket Employment Lawyer can determine if you have grounds for a human rights claim. Contact us today to book an appointment with an employment lawyer. The call is free, and the advice may be invaluable. Our offices are located in Toronto and Vancouver. We serve clients across the country. We are also available for consultations via Skype, Zoom and phone.
