Don’t Trust the Ministry of Labour when it comes to Terminations
You have just been terminated from your employment for the first time. On top of all of this, you are now faced with the extremely difficult decision as to whether you should take a severance offer that the employer insists is a very generous package. You know you need advice and a friend of a friend of yours mentioned that the Ministry of Labour has a free service that can help you out. You think it’s a government ministry so it must be legitimate and what is the harm. However, by calling the ministry and following their advice you can end up missing out on thousands of dollars. I have spoken with many clients who, after being told that they are entitled to many months of severance, confusingly ask “but I spoke to the Ministry of Labour and they said I only get 8 weeks, what gives?” This discrepancy is a result of ministry representatives not being trained lawyers and only providing information as to an individual’s minimum entitlements pursuant to the Employment Standards Act. Any terminated employee in Ontario is entitled to a severance package and Employment Standards Act outlines what an employee’s minimum entitlements are. Generally speaking, every employee’s minimum entitlements are either 1 or 2 weeks per year of service. However, most employees are entitled to a great deal more than what the Employment Standards Act stipulates and, in some cases, can be entitled to 1 or 2 months per year pursuant to the common law. This is where the ministry not only misinforms people but can actually harm an individual’s interests with the information they provide to them. To demonstrate, let us take the example of a 60 year old Bob, who has been recently terminated from his employment after 4 and a half years with his company as a manager. His former employer has offered Bob a severance package equivalent to 2 months of pay. That sounds fair to Bob but he isn’t sure and needs help.
WHAT THIS MEANS FOR EMPLOYEES
If Bob were to speak to the ministry, he would be told that he is entitled to four weeks of pay in lieu of notice and that is it. After speaking to the ministry, Bob would reasonably believe that his former employer’s offer of 2 months is generous and accept the offer. However, if Bob had spoken to a lawyer he would have realized that he is entitled to a severance package in the range of 8 months of pay under the common law. Accordingly, if Bob listens to the ministry’s “advice” then he would end up leaving a substantial amount of money on the table and doing his former employer a huge favour. So if someone tells you to talk to the ministry after you have been terminated, think twice as that phone call could be the most expensive mistake you make in your life. If I can give a single takeaway for this piece, it would be that the Ontario Ministry of Labour can inform you on your minimum entitlements, not your full entitlements. If you’re an employee, you owe it to yourself to at least find out what you are owed.