Termination rights (age 50+)
Terminated at 50+? What factors determine how much severance you can get?
If an employer terminates an employee on a without cause basis, the employee is entitled to reasonable notice in advance of their termination or pay in lieu thereof (i.e. “severance”). The amount of reasonable notice or pay in lieu thereof depends on whether there is an enforceable termination clause in the employment contract. If there is no enforceable termination clause in the employment contract, then the employer’s severance obligations are governed by minimum standards and the common law.
Common Law
The key case shaping severance calculations in Canada is Bardal v. Globe & Mail Ltd. from 1960.
The factors in Bardal that Ontario employment lawyers rely on to calculate severance include an employee’s:
- Age; Salary; Position; Years of Service; Experience, Training, Qualifications;
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Availability of similar employment, having regard to the experience, training and qualifications of the employee; and
- Any other special circumstances that affect your ability to find a comparable job.
In addition, they are numerous other factors that can be in play including but not limited to: overtime pay, benefits package, and bonuses. A company may use these factors to determine the severance package they offer you. Further, read this for more information: Severance Pay in Ontario.
Gazier v. Ciena Canada is a recent case in Ontario that looks into this situation.
Gazier v Ciena, ONSC 865, 2024
The defendants terminated Mr. Glazier, who had worked for them for over 22 years, without cause when he was 58 years old. Moreover, both parties agreed on essential details such as his position, length of service, salary, benefits, and pension plan.
In the case, the main issues addressed include determining the reasonable notice period, compensating for bonus entitlements, valuing benefits, allowing for lost pension contributions, determining vacation entitlement, and assessing whether the plaintiff failed to mitigate his loss.
- Reasonable Notice: The court determined a 24-month notice period, considering Mr. Glazier’s age, service, position, and termination during the pandemic;
- Bonus Entitlement: Mr. Glazier’s entitlement to bonus payments during the notice period was based on a formula consistently applied in previous years;
- Benefits: The court valued the benefits package at $25,000 per year;
- Accrued Vacation: Mr. Glazier was entitled to vacation pay for six weeks based on his base salary; and
- Mitigation: The court found Mr. Glazier had diligently sought new employment. There was no evidence to support the defendant’s claim of failure to mitigate.
They are countless examples of employees getting the severance that they deserve. Moreover, we’re here to help you.
Therefore, fill out a free consultation form and find out how much severance you can get!
