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How do you calculate severance?

Whitten and Lublin | Aug 12, 2013

Employment Contract

Daniel Lublin’s video for the Globe and Mail a few factors to consider.  First, is there an employment agreement that outlines the severance required?  If there is, is it even legal?  Many employment agreements do not comply with Canadian or provincial law and are disregarded by the courts.

If there is no agreement or if the agreement is not enforceable, Canadian courts follow the “common law” which will consider factors such as:

 

  1. Your age;
  2. Your tenure,
  3. The type of job you held;
  4. How long it will take you to find similar employment; and
  5. Precedents.

 

Legal Precedents to Calculate Severance

The truth is, there’s no rule of thumb for you to calculate the correct severance. In a suit, the courts will essentially look at the extenuating circumstances and decide what they think is fair. That being said, there are ways to make an estimate.

 

Standards for Calculating Severance

In each situation of termination, there are statutes found in provincial employment standards legislation that sets out the minimum compensation and notice for termination. Employers must always follow these standards, and are in contravention of the law if they do not. Use a law firm to find these standards, and help you to answer the question of how to calculate severance.