It is pretty rare that an employee will receive a severance package worth more than 2-years of their salary. In fact, it is generally agreed that there is an informal '24 month cap' on the amount of pay that a dismissed employee will receive in severance.
That said, there are exceptions to every rule. A recent case from the Ontario Superior Court of Justice, Markoulakis v. SNC Lavalin Inc., illustrates what circumstances may produce a severance entitlement above the 24-month cap.
Mr. Markoulakis was 65 years old and had been employed by SNC Lavalin for just over 40 years when he was dismissed from his position as a Senior Civil Engineer. At the time of termination, SNC Lavalin provided Mr. Markoulakis with 34 weeks' of pay (being the required amount for termination pay and severance pay under the Employment Standards Act). He disputed this, however, and sought 30 months of compensation through the court process.
Mr. Markoulakis argued that he was entitled to an extraordinary notice period due to the combined effect of his age and length of service. In making this argument, he relied upon a number of cases from across Canada, where similarly situated employees received 24 months of compensation, or more.
The judge accepted this argument and awarded 27 months of notice, concluding that:
On the basis of the evidence, I agree with the Plaintiff that there are exceptional circumstances in this case justifying an award of notice beyond 24 months. The fact that the Plaintiff is over 65, has more than 40 years of service with the Defendant, his only employer, is in my view, exceptional.
This case is an important reminder to employees that:
- In the appropriate circumstances, the courts are willing to increase the amount of notice to which an individual is entitled.
- There are a number of factors that a court will take into consideration when determining the appropriate notice period (such as age, length of service, nature of the position, and availability of comparable employment). If any one of these factors will cause particular hardship for the dismissed worker, the Courts can and will use their discretion to provided additional severance compensation to help aid in the transition to new employment.
- You should not accept that the severance amount provided by your employer is your full entitlement. Many employers, such as SNC Lavalin in this case, try to limit cost. If the worker fails to challenge a low severance offer, the money that should have gone to help with re-employment stays with the company.
If you have recently lost your job and want advice about your severance entitlements, please contact us at: 613-238-4430 or firstname.lastname@example.org.