What to do when you lose your job |
Air Canada recently announced that it will slash as many as 2,000 employees this year. Last month, General Motors shut down its Oshawa truck plant, throwing 2,500 out of work. And now Starbucks, which already plans to close 600 stores worldwide, is also cutting as many as 1,000 non-store jobs as part of its bid to cut costs. |
| |
If you think you might be joining these ranks, make sure you know your rights. For instance, every province has legislation in place to protect workers who lose their jobs. In Ontario, it's known as the Employment Standards Act (ESA). |
| |
Here's what you're entitled to. |
| |
Notice. In most cases, an employer can terminate an employee's job at any time, but it must provide proper written notice, termination pay instead of notice, or a combination of the two, for anyone who has been continuously employed for three months or more. If notice is given, you must be paid your regular wages throughout the notice period. |
| |
This doesn't apply to construction employees, employees on temporary layoff, or those who refuse an offer of reasonable alternative employment. Nor does it apply to those fired for cause. |
| |
There are some situations where companies can't terminate an employee even if they're prepared to give proper written notice or termination pay. For example, an employer can't fire or penalize someone for asking questions about the ESA or exercising a right under the Act, such as refusing to work in excess of the daily or weekly hours of work maximums, or taking a pregnancy, parental, personal emergency or family medical leave. |
| |
How much written notice is required depends on how long you've been with the company. In Ontario, for instance, it's one week for each year of employment, up to a maximum of eight weeks. Other provinces have slightly differing starting points and maximum weeks of notice. That money must be paid no later than seven days after you've been let go or on what would have been the next regular pay day, whichever is later. |
| |
Severance. If you've worked at your job long enough, you may get some additional relief in the form of severance pay. This may be paid as a lump sum or you may keep getting your normal pay for a set number of weeks. In some cases, the money keeps coming until you get a new job. |
| |
Although there are minimum standards, there are no binding rules in calculating how much any particular employee must receive. |
| |
Generally speaking, your entitlement to severance pay is proportional to the length of time that you've been employed, with a longer-term employee receiving more consideration. The rule of thumb is one week for every year of employment, but this varies. Employers are required to award five days pay to employees who have 12 months service or more, or two days pay for every year of employment, whichever is greater. |
| |
But, in many circumstances, these amounts can be much larger. Finding a replacement job is more difficult for older or longer-term workers because they've been out of the job market for longer, and their skills or accreditations have likely atrophied. In the ideal, severance is supposed to recognize this. And, if you feel it doesn't, hunt for an experienced employment lawyer. |
| |
Benefits. Employers must continue to make the contributions required to maintain an employee's benefit plans during the notice period. This applies even if you've received termination pay instead of working part or all of the notice period.
|
| |
Generally speaking, this includes plans like a health plan, dental plan, or insurance at work. These plans may continue for a longer time after you lose your job, depending on your position, time in the job, and your ability to negotiate.
|
| |
Vacation pay. If you have unused vacation days, your employer has to give you cash equal to that amount when you leave. The rate is 4 to 6% of your wages, depending on where you live, although this doesn't include certain specialty groups like police officers or farm workers. |
| |
Pension plan. You have a right to keep the money you saved, plus any money you made investing those savings. Usually, your money will be locked into a registered plan which you'll be able to access when you retire. |
| |
You may be entitled to pension money your employer contributed for you as well, depending on how long you've been in the plan. Often, you have to wait two years or more to be a full plan member so check your plan rules. |
| |
Employment Insurance. If you lose your job through no fault of your own, EI gives you a base to keep going until you get set up. In most cases, you must have worked a minimum of 420 to 700 insurable hours, depending on where you live in Canada and the unemployment rate in your region. |
| |
The basic benefit rate is 55% of your average insured earnings, up to a yearly maximum insurable amount of $41,100. This means you can receive a maximum of $435 per week in benefits, although certain low-income families may receive more. Usually, you get your first cheque within four to six weeks of filing a claim. |
| |
Upon leaving work, you should receive a formal record of employment. This document confirms your employment, your years of service and, among other things, your reason for leaving. |
Apply quickly for EI and be prepared for disappointment. The rules are complex and less than half of those who find themselves unemployed actually receive benefits, Statistics Canada reports.
|
