Are employees entitled to two months’ severance for every month of service?
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What about the common belief that courts award one month of severance per year of service?
That was not the experience of Moyra Miller, who was recently awarded 14 months’ pay from the Ontario Superior Court Justice Maria Carroccia, after working for only seven months for Alaya Care as its vice president, client services.
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This was, to me, an unsurprising decision, despite ostensibly flying in the face of that popular severance myth.
The reality is, there is no formula or severance calculator that reflects what judges actually do in determining what an employee is entitled to upon termination.
The main factors are usually the employee’s re-employability, age, position, length of service and remuneration. Those factors are all put into the hopper and then the court decides what a particular case is worth.
But there are other factors a court might look at as well.
In my Thomson Reuters text, The Law of Dismissal in Canada, I list more than 150 factors that courts have looked at in different cases to determine appropriate severance. A quick review of those factors can help inform what an employee should argue and an employer be concerned about (or alternately argue) in any given case, as they can increase or decrease the severance a court might award.
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