The company where I work is going through a turmoil. Things have not been going as well as expected so the stockholders are asking for changes. As it usually happens worldwide, the first variable of adjustment is the payroll.
This week a few employees were laid off and, who knows, this may continue for a few more months. So far, I’m safe… but who knows!
Given all this, I started to look for information on what happens in these cases, what the law says, what are the appropriate names used (the buzzwords, right?) and so on. And as I always do, I share this information with you…
Being Fired and Being Laid Off… What’s the difference?
I always thought it was the same thing, but a few days ago I found that it’s not. As seen on Wisegeek…
Generally speaking, an employee can be fired or involuntary terminated for violating company policies or failing to perform up to established standards
An employee can be laid off for any number of reasons outside his or her control.
So there’s a difference. And as it looks like, you can get a severance only if you are laid off, but not when you are fired.
What’s a “Severance”?
According to the Ontario Ministry of Labour…
“Severance pay” is compensation that’s paid to a qualified employee who has his or her employment “severed.” It compensates an employee for loss of seniority and job-related benefits. It also recognizes an employee’s years of service.
Severance pay is not the same as termination pay, which is given in place of the required notice of termination of employment.
And it looks like not everyone is entitled to receive one.
Who can receive a Severance Pay?
From the Ontario Ministry of Labour website…
An employee qualifies for severance pay when his or her employment is severed and he or she:
- has worked for the employer for five or more years (including all the time spent by the employee in employment with the employer, whether continuous or not and whether active or not)
- his or her employer:
- has a payroll in Ontario of at least $2.5 million;
- severed the employment of 50 or more employees in a six-month period because all or part of the business closed.
The website also provides a tool to help you calculate an estimation of your severance.
Which is also the definition given at the .
The Canadian Ministry of Labour, adds in its website…
The Canada Labour Code also provides for severance pay to employees who have 12 months service or more. Ontario has a similar provision covering employees with five years’ service or more. In both jurisdictions, severance pay is payable in cases of both group and individual termination of employment provided the eligibility requirements are met.
You can read more about this here:
Have you ever been “severed” or terminated? Did you get a package? How long did your unemployment period was?