Creditor protection means staff cannot file claim for severance
Q: I worked for a large employer for 36 years. Two weeks ago I was told that my employment was over. I was given my outstanding wages and vacation pay and nothing more. The company is in creditor protection right now. Is there anything I can do to get a severance package?
A: There is very little you can do. Theoretically, your rights are being sacrificed for the greater good. I am sure that is little consolation for you and your family. After all those years, you are owed 34 weeks pay pursuant to the Employment Standards Act — even if you get a betterpaying job tomorrow. Additionally, you could get up to two years lost wages, which would include that 34-week minimum. Those would be your normal entitlements if you could take this to court.
The problem is, you are not allowed to take the matter to court as any claim you had a lawyer issue would be immediately thrown out — with cost consequences against you. Until further notice, you and all the other terminated employees are prohibited from bringing a claim through the normal processes.
The rights of creditors and employees are being compromised in various ways by the creditor protection process in the hope that some viable entity will continue on as a business. The thinking is that this is the greater good in the long run.
We’ll see. It is possible that in the future you may be able to make a claim depending on what the judge in charge decides.
Q: I employ about 20 people in my small company. Things are going fairly well and as a result, I have recently learned that five employees did not take all of their paid vacation for the past few years.
Perhaps I should have, but I did not know this was happening. I realize I have to pay out what they accumulated, but how do I control this in the future?
A: Immediately adopt a policy which states, “All employees must take two weeks off per year. Employees entitled to more than two weeks vacation per year may defer the excess weeks for a maximum of six months past the end of the year in which the vacation was to have been taken. If the excess weeks have not been taken by the end of six months, they are no longer available and vacation pay will not be paid for any weeks over the twoweek minimum to which the employee is entitled.”
You don’t have to provide a sixmonth extension. Two weeks is the minimum required by the Employment Standards Act.
Regardless of whether an employee has accumulated enough vacation pay to cover the two weeks, it is up to you to require them to take the two weeks off. But anything over the two-week minimum required by the Act could be specified, at your discretion, in any policies you want to develop.
What you see above is a “use it or lose it” policy. It is quite common, especially for smaller employers. Allowing vacation pay to accumulate indefinitely can be hard on your cash flow, especially if it is suddenly cashed in by a terminated or resigning employee.
Q: For the third time in two years, one of the drivers in my employ has been in a fender bender that was his fault. This is significantly affecting my insurance and deductibles. Can I deduct the increased costs from his paycheque?
A: No. Not even if he consents in writing. Don’t even suggest it. Accidents at work are considered faulty workmanship and the Employment Standards Act prohibits deducting for mistakes of this kind in the course of employment.
If he wants to write you a cheque in the hope that it might save him from a termination, that is up to him. You may need to sit down and weigh the cost of keeping him on versus the cost of terminating the relationship.