Ask the ExpertSeverance calculation
Leah Enright asked 2 years ago

Do you have any guidance for employers who are establishing a severance calculation for involuntary separations? 

2 Answers
Glenn Demby Staff answered 2 years ago

The basic answer is that you must provide whatever benefits to which the employee is entitled under either employment standards laws (if he’s non-union), the collective agreement (if he’s union) or the employment contract, depending on whether termination is with or without cause.
Basic questions:

  1. Which province are you in (or are you federally regulated)?
  2. Is the employee union or non-union (or management)?
  3. What are the reasons for separation–resignation, termination with cause, termination without cause?
  4. Are there any outside contracts or agreements covering termination of his employment


Leah Enright replied 2 years ago

Hi Glenn,

Thank you for your feedback.

1. We have employee living across Canada.
2. Our employees are non-union
3. The reason for separation would be termination without cause or restructuring.
4. As of today, there are no outside contracts/agreements covering termination of the employment.

Glenn Demby Staff answered 2 years ago

Thank you for clarifying. One point of clarification I want to make is that I assume that “severance calculation” means termination payments each employee is due. In this case, because termination is without cause, employees would be owed the termination notice, unpaid vacation and other amounts to which they’re entitled under the employment standards law for the province of employment. Payroll will have to do the calculations for each employee. I hope that answers your question. Glenn