Severance package

Employers are required to pay severance pay after an employee working in Puerto Rico is terminated.[3][4] Employees are not permitted to waive this payment.[5] Severance pay is not required if the employee was terminated with "just cause."[4]

Just cause is satisfied in any of the following situations: the employee had a pattern of improper or disorderly conduct; the employee worked inefficiently, belatedly, negligently, poorly; the employee repeatedly violated the employer's reasonable and written rules; the employer had a full, temporary, or partial closing of operations; the employer had technological or reorganization changes, changes in the nature of the product made, and changes in services rendered; or the employer reduced the number of employees because of an actual or expected decrease in production, sales, or profits.[6]

An employee with less than five years of employment with the employer must receive a severance payment equal to two months of salary, plus an additional one week of salary for each year of employment. An employee with more than five years but less than fifteen years of employment must receive a severance payment equal to three months of salary, plus an additional two weeks of salary for each year of employment. An employee with more than fifteen years of service must receive a severance payment equal to six months of salary, plus an additional three weeks of salary for each year of employment.[7]

In Ontario, the amount of severance pay under the employment law is given in Ontario by Employment Standards Act (ESA),[8] which is also explained in 'Your Guide to the Employment Standards Act's Severance Pay Section'.[9] The amount of severance pay under the employment law in Ontario may be calculated using the tool from Ontario Government.[10] It is stated in ESA's Guide Wrongful dismissal section: "The rules under the ESA about termination and severance of employment are minimum requirements. Some employees may have rights under the common law that are greater than the rights to notice of termination (or termination pay) and severance pay under the ESA. An employee may want to sue their former employer in court for wrongful dismissal".[11]

Common law provides above-minimal entitlements, using a well-recognized set of factors from Bardal v Globe and Mail Ltd. (the "Bardal Factors").[12][13] Bardal Factors include:

• the length of service of the servant,
• the age of the servant,
• the character of the employment (more senior, longer time needed to reach the similar seniority, job function)
• the availability of similar employment, having regard to the experience, training and qualifications of the servant (the likelihood of getting a similar job in the future).

There is a severance pay calculator based on common law "Bardal Factors" that predicts the amount of severance pay owed as determined by the court.[14] The goal is to provide enough notice or pay in lieu for the employee to find comparable employment. Unlike statutory minimum notice, the courts will award much more than 8 weeks if warranted by the circumstances, with over 24 months' worth of pay in damages possible. Other factors considered may include:

• Inducement: If you were convinced to leave a previous job for one which quickly let you go, you may be able to get extra compensation, especially if your previous position was very stable and you were not looking for a new job.
• Bad faith: If you were fired in a particularly cruel manner, harassed or lied to by your employer, extra compensation may be required.[15] Also see Wallace v United Grain Growers Ltd.
• Duty to mitigate: You must show that you are actively looking for another job.
• Wilful misconduct by the employee: This is more than simply not doing a good job, but involves being deliberately and recklessly negligent or disobedient.

The biggest factor in determining severance is re-employability. If someone is in a field or market where they will have great difficulty finding work, the court will provide more severance. The reason being that the primary purpose of severance is to provide the wrongfully dismissed employee the opportunity to secure other employment within the period provided.[16][17] (See also Canada section in wrongful dismissal for related litigation cases in Canada.)

In Canadian common law, there is a basic distinction as to dismissals. There are two basic types of dismissals, or terminations: dismissal with cause (just cause)[18] and termination without cause. An example of cause would be an employee's behavior which constitutes a fundamental breach of the terms of the employment contract. Where cause exists, the employer can dismiss the employee without providing any notice. If no cause exists yet the employer dismisses without providing lawful notice, then the dismissal is a wrongful dismissal.

There is a time limit of two years from the date of termination for suing the employer in Ontario. This litigation follows civil procedure in Ontario. Before starting a court case,[19] there are other options,[20] such as, negotiation, mediation, and arbitration.

Typically in a civil lawsuit, in 2019, it can cost $1,500–$5,000 to initiate an action and have a lawyer deliver a Statement of Claim. Responding to the opposing side's documents and conducting examinations for discovery will likely involve another $3,500–$5,000. The preparation and presentation of your case at trial is likely to add another $5,000—$15,000 to your legal costs.[21] These legal expense is income tax deductible.[22]

There are free Legal information and referral services offered on a confidential basis funded from government (The Access to Justice Fund[23]) for all areas of law in major cities, such as, Ottawa Legal Information Centre.[24]